When the owner of Class 3 firearms passes away, his or her executor, administrator or personal representative (PR for this blog) is faced with some unique issues if the estate consists of one or more Class 3 (NFA) firearms. The PR named in a will gets himself or herself appointed and then commences the task of administering the estate. The PR will collect the assets, determine and pay the debts and administration expenses and then in due course commence distribution of assets to the rightful beneficiaries.
A PR not familiar with federal firearms statutes, regulations and rules could easily step into a potential minefield for himself, herself or itself and the beneficiary receiving the distribution by distributing a Class 3 firearm that is not registered and/or without fully complying with federal law and the applicable state law. There could be substantial criminal fines and imprisonment for both parties if the distribution process is not handled properly. How this process is handled has been addressed in two prior blogs.
To minimize these sorts of issues, a gun trust might be considered to avoid the probate process. And depending on how the gun trust is worded, distribution of Class 3 weapons by the trustee could be deferred into the future while allowing the designated beneficiaries to have use for life or a term of years, provided that they qualify under law to have custody and possession and that all appropriate legal requirements are fulfilled.
For this blog, one more question to be addressed is how long a trust can legally exist before it must be terminated and its assets distributed This is strictly a state law question, and there are a variety of answers, depending on the state. In Arizona, a trust may not extend more than 500 years beyond the creation of a non-vested property interest, which is likely 500 years from the death of the settlor (the person creating the revocable trust), at which time th trust must distribute and terminate..
Some states have no time limits and other states still follow the old English common law Rule Against Perpetuities or lives in being plus 21 years and 9 months.
Future blogs will examine the gun trust in greater detail.
Michael W. Margrave