California Gun Trusts, Part 2

Part one of gun trusts left you wondering what is a gun trust, how can it help you, and will it be worth it after all is said and done?

Before discussing the benefits of a gun trust, consider these California gun transfer requirements.

• A firearm may only be loaned to immediate family (parent, child, sibling, grandparent, or grandchild) for 30 days or less.
• Any loan of a gun to immediate family for longer than 30 days, and any loan of a gun for any period to a person outside your close family, must be registered through a firearms dealer.
• Any person who receives a gun (e.g., as a gift or by inheritance) from a member of his or her immediate family must submit paperwork to the State of California within 30 days.
• Any person who receives a handgun (e.g., a pistol) of any kind must first obtain a handgun safety certificate from the State of California.
• Any violation of these regulations is a crime, punishable by imprisonment of up to four years (though most innocent first-time offenses are misdemeanors).

A gun trust is not a trap for those not versed in legal jargon. It is a legal entity that is created pursuant to state and federal laws. The trust is set up after submitting the proper applications to the ATF for manufacturing (Form 1), transferring (Form 4, 5), and transporting firearms (Form 20). Form 23 will also be required for “responsible persons” to fill out. Who qualifies as responsible persons will be explained later in this article.

Some people simply place their guns into their regular estate plans (wills, trusts, etc.). While this may be possible, new California gun laws make transfers of firearms through traditional trusts and estates risky and unadvisable.  Gun trusts are created specifically for firearms and the situations that may arise with passing one on to your children and heirs.

A gun trust will also help owners navigate all the rules and regulations surrounding firearms in America and especially in California. Among others, a gun trust provides the following benefits:

1. Transfers firearms from one owner to the next
2. Prevents accidental felonies
3. Allows temporary use by multiple trustees
4. Maintains more privacy
5. Avoids involuntary sale or surrender of firearms prohibited by recently-passed laws
6. Avoids probate death
7. Protects ownership
8. Avoids court issues (minors, new regulations, etc.)
9. Avoids long delays or eventual confiscation
10. Manages risk to all other assets

Where a child inherits a firearm in California after the death of a parent, and no gun trust exists, the child would need to follow each step of both state and federal laws to transfer the gun from the estate to the heirs.  A violation could lead to imprisonment. A gun trust resolves these risks in advance, allowing the transfer of the firearm from one generation to another. A gun trust allows the initial firearm owner to plan in advance how to allow access to the firearms, and how to transfer them upon death to heirs, all without burdening the receiving family members with the unknown risks of receipt of a gun.

Without a gun trust, an owner of a firearm will have to pay a tax to transfer all NFA weapons. Along with the tax, the transfer also used to require the signature of a Chief Law Enforcement Officer (CLEO), which were next to impossible to obtain in some circumstances. However, in 2014 the Obama administration passed Rule 41F eliminating the necessity of the CLEO’s signature. In early drafts of the bill, the original idea was to extend the CLEO certification to even those transfers conducted by a trust. If the bill would have passed at that stage, local law enforcement would have had veto power over all NFA applications.

However, as Rule 41F went into effect, instead of increasing the need for the CLEO certification, it has eliminated the certification all together. A notification is still required to be sent to the CLEO though. Rule 41F has created a new definition of who a trust’s responsible person can be. The new definition is as follows; any member of a trust “who has the power and authority to direct the management and policies of the trust or legal entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of an NFA item for, or on behalf of the trust or entity.”[1] This added security measure to a gun trust ensures that a prohibited person does not acquire the firearm.

The new rule also included the need to have all trustees send in background checks and fingerprints, complicating the overall process more. Another important fact to note is that gun trusts are different from wills in that they are only through the National Firearm Association (NFA). The trusts must be made in accordance to state and federal laws dealing with the NFA.

With the increase in complexity, it is now even more valuable to have a knowledgeable attorney to aid you in starting and maintaining your trust. When choosing a lawyer to help you set up a trust, it is important to pick someone who shares your passions about protecting your assets, will do everything possible to properly start and maintain your trust, and who is willing to explain the complex matters to you so that your trust is your trust and not a mystery to you.

We can assist in setting up gun trusts for you and your family. Our firm can provide insight to the intricate and messy details that gun trusts sometimes entail, that individuals will not find in online sources while attempting to set up their own.

Keep in mind that a gun trust is valuable to you even if your trustees do not share your passion for firearms, or you move somewhere that has different laws, or you own a firearm that has the potential to be banned in the future. By securing your firearms within a trust you protect those assets from future issues, you protect your trustees (authorized users), you protect your heirs, and you protect yourself.  If you are ready to begin the process of setting up a gun trust or have any questions give us a call or send us an email.

[1] 27 C.F.R. § 479.11