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There are restrictions and regulations that apply to the purchase and ownership of Title II Firearms — firearms regulated by the federal government pursuant to the National Firearms Act (NFA). When an individual purchases a Title II Firearm, the Chief Law Enforcement Officer (CLEO) where the individual resides must sign the ATF Form 4 or ATF Form 1. These forms also require photographs and fingerprints. The form is then submitted to the Bureau of Alcohol Tobacco, Firearms and Explosives (ATF).

What is a Gun Trust?

A Gun Trust is a special type of trust that has been created to deal with the unique issues of firearms purchases, ownership, transfer, possession, and use of firearms. A gun trust is designed to deal with regular firearms as well as Title II firearms and is quick and easy to create.

What are Title II Weapons?

  • Machine Guns

  • Short-Barreled Rifles and Shotguns

  • Suppressors

  • Destructive Devices

What Are The Benefits of Using a Gun Trust to Own Title II Weapons?

There are numerous benefits to using a gun trust to own Title II (sometimes called Class 3) weapons regulated by the NFA:

  • No CLEO signature required

  • No fingerprints and photographs required

  • Approval by ATFis usually faster than individual applications

  • Privacy:  While your NFA weapons are still registered with ATF, you need not notify local law enforcement of your acquisitions

  • Your trust is written to provide for clear and concise instructions regarding the handling of your weapons if you become incapacitated and at your death

  • Your trust automatically plans for your beneficiaries’ inheritance of your NFA weapons, with safeguards to ensure legal transfer and possession

  • Peace of mind knowing that you are in full compliance with all federal, state, and local gun laws

Do I Own My NFA Weapons Held in Trust?

Yes. While you are alive, you are the grantor, trustee, and beneficiary of your gun trust. This enables you to create, manage, and benefit from the trust. Since the trust is revocable you retain the right to make any changes to the trust. You have the right to buy additional NFA items and to sell NFA items owned by the trust.

Who May Possess NFA Weapons Owned By A Gun Trust?

Anyone who is listed as a trustee or beneficiary of the trust and is not legally prohibited from possessing or using an NFA firearm may legally possess the NFA weapons owned by the trust. This provides a great deal of flexibility for you to allow others access to your NFA weapons. You may also name successor trustees who will not act as trustees immediately but who will become trustees in the event that all of the initial trustees have ceased acting as trustees. Since a gun trust is revocable, you have the ability to add and remove trustees and successor trustees at will.

Gun Trust vs. Corporation Or LLC

A gun trust is not the only option when it comes to owning NFA weapons. Corporations and LLCs can be a legitimate option for owning NFA weapons under some circumstances. However, a gun trust avoids issues associated with LLC’s and corporations:

  1. Annual Cost:  In addition to the initial filing fee, the Secretary of State charges a yearly fee to process an annual report for LLCs and corporations. A gun trust has no recurring fees and no required annual filings.

  2. Additional Risk:  If you fail to pay the fee and file the annual report in a timely manner, the Secretary of State will dissolve your business entity. If this happens while your corporation or LLC owns NFA weapons, you will be in illegal possession of NFA weapons and could be subject to federal prosecution with a maximum penalty of 10 years in prison and a $250,000 fine.

What Happens To My NFA Guns If I Die Or Become Incapacitated?

One of the most valuable benefits of a gun trust is that it comes with the built-in benefits of estate planning. If you die or become incapacitated, your successor trustee will manage your NFA weapons according to whatever instructions you leave. If you have adult children that you wish to leave your NFA weapons, your successor trustee will be responsible for transferring those weapons. If your children are minors, the successor trustee will be responsible for safekeeping the NFA weapons until your children reach an appropriate age.

Can My NFA Weapons Stay In Trust For The Benefit of My Children After I Die?

Yes. Your beneficiaries, usually your children, will be able to possess and use the NFA weapons owned by the trust. They will also gain the ability to add beneficiaries of their own so that the NFA weapons can remain in trust for multiple generations without requiring additional ATF transfer approvals or transfer taxes. The beneficiaries will have the ability to sell the NFA weapons and terminate the trust if they all agree to do so, but the default rule will be that the trust will continue and the NFA weapons will remain in the trust. With the new law in Colorado outlawing the possession of large-capacity ammunition magazines, a gun trust is the best, legal method to keep existing large-capacity magazines in your family.

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