What You Should Know About Gun Trusts in Arizona
1. What is a Gun Trust?
A Gun Trust is an alternate method for ownership of firearms, used instead of individual ownership. It is usually drafted as a revocable living trust for the limited purpose of holding title to personal firearms and weapons. A Gun Trust is commonly used for ownership of federally-regulated firearms, also known as Title II or NFA items. When properly drafted, a Gun Trust promotes responsible handling of firearms, and is entirely legal.
The Gun Control Act of 1968 governs the ownership and use of firearms. Title I grants authority to the states for regulation of handguns, rifles and shotguns. Title II is known as the National Firearms Act (“NFA”), and it regulates short-barreled rifles and shotguns, silencers, machine guns, destructive devices (“DD”), and other weapons (“AOW”). NFA items must be registered with the Bureau of Tobacco, Alcohol, Firearms, and Explosives (“BATFE”). There are severe penalties for use, possession, or transportation of NFA items in violation of federal regulations.
2. What are the benefits of a Gun Trust?
The benefits of a Gun Trust are:
- Faster registration or transfer process for NFA items.Typically, the purchase or transfer of a NFA item requires an individual to submit a fingerprint card and photograph, submit to a background check, and get approval from the local Chief Law Enforcement Officer (“CLEO”), usually the Sheriff. A Gun Trust eliminates these requirements.
- Prevents accidental felonies. A Gun Trust is carefully drafted to restrict the handling or transportation of firearms by unregistered persons. Receiving or possessing a NFA item transferred in violation of NFA regulations is a criminal offense, whether intentional or not. In addition, NFA regulations prohibit many persons from possessing NFA items.
- Expands list of eligible possessors of NFA items.A Gun Trust expands the list of eligible persons who may handle or transport a NFA item. Any trustee is eligible, along with any named beneficiary who acts under the authority of a trustee. The Gun Trust eliminates the need for each trustee and beneficiary to register with the BATFE before handling the NFA item.
- Privacy. When using a Gun Trust, a person can purchase NFA items without identifying himself to the Sheriff or local police.
3. Do all gun owners need a Gun Trust?
Currently, there is no registration or licensing of non-NFA firearms in Arizona (with the exception of voluntary permits to carry a concealed weapon). Thus, a handgun owner, for example, achieves no immediate benefit by establishing a Gun Trust. The Gun Trust would simply be a more cautious and intentional approach to the handgun’s transfer upon the owner’s incapacity or death.
4. What about using an existing trust, corporation, or LLC instead?
The usual purpose of a revocable living trust is to avoid court interference with financial assets in the event of the owner’s incapacity or death. It will not include provisions specifically intended to prevent accidental felonies due to handling or transportation of NFA items by unregistered or ineligible persons.
In Arizona, a Gun Trust is a better option than a corporation or limited liability company because business entities must be registered with the Arizona Corporation Commission. Each has filing and reporting requirements that a trust does not. In fact, a Gun Trust is not filed or recorded anywhere except with the Bureau of Tobacco, Alcohol, Firearms, and Explosives (“BATFE”).
5. How do I purchase a NFA firearm using a Gun Trust?
After identifying the NFA item to be purchased, the registration process involves sending two copies of Form 4 (www.atf.gov/forms/firearms), which should be printed as a double-sided document, a copy of the entire trust agreement, Certification of Compliance, and $200, to the BATFE. If purchasing from a dealer or broker, they will help you fill out Form 4. It is important not to list the NFA item on a list of trust assets (“Schedule”) until after the BATFE has approved the purchase. Processing time is usually about 7 to 10 weeks for trust registrations (compared to about 12-15 for individual registrations).
6. How much does a Gun Trust cost?
A Gun Trust is a specialized form of trust tailored to meet the requirements of federal and state firearm laws. Very few attorneys in Arizona regularly prepare Gun Trusts, so a typical fee is hard to determine. If the trust can be drafted with minimal customization, a qualified Arizona attorney might prepare a Gun Trust for $250 to $750.
About the Author
Thomas J. Bouman provides legal counsel in the areas of estate planning, estate settlement, and asset protection. He brings a highly systematic approach to the practice of law, which is critically important when wading through the complex, and often bizarre, legal requirements associated with estate and trust law. Mr. Bouman is author of the Arizona Estate Administration Answer Book and a prominent member of Wealth Counsel, LLC, the nation’s premiere organization of estate planning attorneys.
Thomas J. Bouman, Attorney
Bouman Law Firm
7650 E. Broadway Blvd. #108
Tucson, AZ 85710
(520) 546-3558
