When people think about trusts, many think of family trusts, insurance trusts, education trusts and the like, which are utilized for traditional estate planning purposes. Recently I have had occasion to draft a different type of trust-the gun trust, which is a special type of trust created to own and possess Class 3 firearms.
I will do a number of posts on this subject.
The first is to give a bit of background. From what I see, the gun trust offers three potential advantages. First, the creator of the trust (which, in Arizona is called the “settlor”) sets out in the trust instrument:
- (a) the specifics as to current and future beneficiaries of the trust as to possession, use and eventual ownership of the trust;
- (b) the names of the current and future trustees and third the posers of the trustee, including insuring that any trustee; and
- (c) specify and enforce the legal requirements for beneficiaries who are named with rights to possess, use and own Class 3 firearms under the federal and applicable state statutes, regulations and rules.
Second, by specifying a chain of beneficiaries in the trust, the settlor is able to pass the Class 3 firearms to downstream beneficiaries without having to go through the normal and lengthy transfer process. And third, federal law pertaining to submitting Form 1 or Form 4 does not require first submitting the application to the local law enforcement officer with photos and fingerprints for the lengthy background check, which, depending on jurisdiction could easily take between 45 and 120 days due to backlog, shortage of personnel and other reasons.
When using a gun trust to own the Class 3 firearms, the appropriate form is submitted directly to AFF. While corporations and limited liabilitie companies can also be used to own Class 3 firearms, each of those entities offers less privacy and the possibility of annual fees and tax returns.
In Arizona, there is an annual Corporation Commission fee for a corporation, but there is no annual fee assessed for a limited liability company.
Michael W. Margrave