NFA Gun Trust (Arizona)
1. What is a Gun Trust?
A Gun Trust is a legal entity intended to own firearms and used as an alternative to individual ownership. It is usually drafted as a revocable living trust for the limited purpose of holding title to personal firearms and related accessories. A Gun Trust is most beneficial for persons in possession of federally-regulated firearms, also known as Title II or NFA firearms. When properly drafted, a Gun Trust promotes responsible handling of firearms, and is entirely legal.
The Gun Control Act and its accompanying federal regulations govern the ownership and use of firearms. Title I grants authority to the states for regulation of handguns and most rifles and shotguns. Title II refers to the National Firearms Act (“NFA”), and it regulates short-barreled rifles and shotguns, suppressors (silencers), machine guns, destructive devices (“DD”), and other weapons (“AOW”). NFA firearms must be registered with the Bureau of Tobacco, Alcohol, Firearms, and Explosives (“BATFE” aka “ATF”). There are severe criminal penalties for possession, use, or transportation of NFA firearms in violation of federal laws.
2. What are the benefits of a Gun Trust?
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 who does not own any NFA firearms is not a likely candidate for a Gun Trust. However, a Gun Trust may be appropriate in some cases because of its estate planning and inheritance protection features.
4. What about using an existing trust, corporation, or LLC instead?
A Gun Trust incorporates specific provisions regarding the Gun Control Act and its accompanying regulations while other trusts rarely do. For example, a typical living trust might permit distribution or handling of firearms to or by a prohibited person without calling attention to the unique legal issues presented when doing so. It might also complicate the process of purchasing a firearm if the number of responsible persons for NFA firearms is not carefully limited.
In Arizona, a Gun Trust is a better option than a corporation or LLC because business entities must be registered with the Arizona Corporation Commission. A trust is private and not under the oversight of any government entity.
5. How do I purchase a NFA firearm using a Gun Trust?
After identifying the NFA firearm to be purchased, your FFL/SOT dealer can initiate a Form 4 transfer application (eForm) on your behalf. The Form 4 must be accompanied by a copy of the entire trust document and payment of the transfer tax (usually $200 per firearm). Also required for each Responsible Person (typically, only the current trustees with possession authority) is a completed Form 23, two fingerprint cards (FD-258), and a 2x2 passport-style photo. You must also send copies of Form 4 and Form 23 to the chief law enforcement officer (usually the sheriff) in the place where the trustee resides.
It is important not to list the NFA firearm on a list of trust property (some trust forms use a Schedule A) until after the ATF has issued the tax-paid stamp approving the transfer.
If you are purchasing a NFA firearm from an individual, then you will submit all this documentation in paper form by mail.
Note: I do not prepare NFA Gun Trusts a la carte; instead, they are offered as an available "add-on" component to an estate plan. If you're looking for a Gun Trust and nothing more, I endorse Trent Woods at www.AZGunLaw.com.
About the Author
Thomas J. Bouman provides legal counsel in the areas of estate planning, estate administration, 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 the author of the Arizona Estate Administration Answer Book and a prominent member of WealthCounsel, the nation’s premiere organization of estate planning attorneys.
A Gun Trust is a legal entity intended to own firearms and used as an alternative to individual ownership. It is usually drafted as a revocable living trust for the limited purpose of holding title to personal firearms and related accessories. A Gun Trust is most beneficial for persons in possession of federally-regulated firearms, also known as Title II or NFA firearms. When properly drafted, a Gun Trust promotes responsible handling of firearms, and is entirely legal.
The Gun Control Act and its accompanying federal regulations govern the ownership and use of firearms. Title I grants authority to the states for regulation of handguns and most rifles and shotguns. Title II refers to the National Firearms Act (“NFA”), and it regulates short-barreled rifles and shotguns, suppressors (silencers), machine guns, destructive devices (“DD”), and other weapons (“AOW”). NFA firearms must be registered with the Bureau of Tobacco, Alcohol, Firearms, and Explosives (“BATFE” aka “ATF”). There are severe criminal penalties for possession, use, or transportation of NFA firearms in violation of federal laws.
2. What are the benefits of a Gun Trust?
- Expands list of eligible possessors of NFA items. A Gun Trust may expand the list of eligible persons who may possess, use, or transport a NFA firearm. Any current trustee is eligible including the initial trustee and any later named co-trustees. For example, you might establish a Gun Trust and later add your spouse and child as co-trustees.
- Prevents accidental felonies. A Gun Trust will strictly prohibit unauthorized use and handling of NFA firearms during the initial trustee’s lifetime and after death, and educate all persons involved about relevant laws and regulations. For example, a well-drafted Gun Trust document will clearly articulate who may use and possess NFA firearms and who may not. This will help prevent the trustee and the trustee’s family from committing accidental felonies.
- Estate planning. Upon incapacity or death of the initial trustee, a successor trustee is named to manage the trust and possess and distribute firearms without any probate or other court interference.
- Inheritance protection. Upon incapacity or death of the initial trustee, a Gun Trust may provide long term protection of the trust property from creditors of the beneficiaries and in the event of a beneficiary’s bankruptcy or divorce.
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 who does not own any NFA firearms is not a likely candidate for a Gun Trust. However, a Gun Trust may be appropriate in some cases because of its estate planning and inheritance protection features.
4. What about using an existing trust, corporation, or LLC instead?
A Gun Trust incorporates specific provisions regarding the Gun Control Act and its accompanying regulations while other trusts rarely do. For example, a typical living trust might permit distribution or handling of firearms to or by a prohibited person without calling attention to the unique legal issues presented when doing so. It might also complicate the process of purchasing a firearm if the number of responsible persons for NFA firearms is not carefully limited.
In Arizona, a Gun Trust is a better option than a corporation or LLC because business entities must be registered with the Arizona Corporation Commission. A trust is private and not under the oversight of any government entity.
5. How do I purchase a NFA firearm using a Gun Trust?
After identifying the NFA firearm to be purchased, your FFL/SOT dealer can initiate a Form 4 transfer application (eForm) on your behalf. The Form 4 must be accompanied by a copy of the entire trust document and payment of the transfer tax (usually $200 per firearm). Also required for each Responsible Person (typically, only the current trustees with possession authority) is a completed Form 23, two fingerprint cards (FD-258), and a 2x2 passport-style photo. You must also send copies of Form 4 and Form 23 to the chief law enforcement officer (usually the sheriff) in the place where the trustee resides.
It is important not to list the NFA firearm on a list of trust property (some trust forms use a Schedule A) until after the ATF has issued the tax-paid stamp approving the transfer.
If you are purchasing a NFA firearm from an individual, then you will submit all this documentation in paper form by mail.
Note: I do not prepare NFA Gun Trusts a la carte; instead, they are offered as an available "add-on" component to an estate plan. If you're looking for a Gun Trust and nothing more, I endorse Trent Woods at www.AZGunLaw.com.
About the Author
Thomas J. Bouman provides legal counsel in the areas of estate planning, estate administration, 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 the author of the Arizona Estate Administration Answer Book and a prominent member of WealthCounsel, the nation’s premiere organization of estate planning attorneys.