by Ron Holmes
You probably have heard of a Gun Trust, but may not know what that really is or why anyone would need one. Anyone who owns Title 2 firearms might consider a Gun Trust in order to “legally” transfer title to his Title 2 firearms upon his death, but there are serious pitfalls for the unwary.
Classification of Firearms
A Title 2 firearm includes only the following:
- rifles with a barrel of less than sixteen (16) inches in length, or an overall length of less than twenty-six (26) inches;
- shotguns with a barrel less than eighteen (18) inches in length, or an overall length of less than twenty-six inches;
- machine guns (defined essentially as any firearm that shoots multiple rounds with a single trigger pull);
- any silencer; and
- destructive devices (including hand grenades, bombs, large caliber weapons like mortars).
These weapons are what are commonly referred to as “NFA” or “Class 3” firearms, which generally require different or special licensing and training to legally possess. All other firearms are Title 1 firearms. The important difference is that Title 2 firearms are subject to more stringent regulations with which owners must comply.
Title 2 Firearms and Gun Trusts
A Title 2 firearm must be registered in the National Firearms Registration and Transfer Record (“NFRTR”), which is kept by the Bureau of Alcohol, Tobacco and Firearms (the “ATF”). It is this requirement to register Title 2 firearms with the NFRTR which causes issues with transferring Title 2 firearms. If a Title 2 firearm is not registered under the NFRTR, then the firearm is considered “contraband,” as defined in Title 2. Further, if a Title 2 firearm is owned or possessed by anyone other than the registered owner under the NFRTR, the firearm is considered “contraband” (subject to just a few exceptions). Once a Title 2 firearm becomes contraband, it becomes virtually impossible to “re-legitimize” the firearm, making that particular firearm permanently unlawful to possess. The lone exception to this is that if a firearm is contraband under Title 2 and the particular feature subjecting the firearm to Title 2 regulation can be removed or modified (e.g., removing the short barrel of a shotgun and replacing with a barrel above the 18 inch limit), then the firearm can be removed from Title 2 regulation and “re-legitimized.” However, in the case of silencers and machine guns, there is no way to re-legitimize.
The criminal penalties for a violation of Title 2 are severe. First, a violation of Title 2 does not require a culpable mental state. The mere possession of contraband under Title 2 constitutes a felony punishable by up to ten (10) years in prison and a $250,000.00 fine, forfeiture of all firearms, and permanent loss of the right to own a firearm. In addition, any vehicle, boat, or aircraft used to transport the contraband is also subject to seizure. Thus, it is possible to commit an “accidental felony” under Title 2 – that is, a person may come into possession of Contraband without realizing the firearm is illegal to possess.
This is where Gun Trusts come in. These trusts have become a popular response to the stringency of Title 2. For example, if an estate contains Title 2 firearms registered in the decedent’s name, the firearms would be considered Contraband if the executor distributed the firearms to any beneficiary, as the decedent would be the only person lawfully allowed to own and transfer the firearm. Once the decedent dies, it becomes impossible to transfer ownership of the firearm, leaving the executor with no choice but to surrender the firearm to the federal government.
However, a Gun Trust may be the registered owner of Title 2 firearms under the NFRTR. Placing Title 2 firearms in the trust allows the trustee, upon the death of the decedent, to lawfully transfer the firearm to the beneficiaries of the estate. The firearms can then be registered under the NFRTR in a beneficiary’s name. This is the major benefit of the Gun Trust – it allows a decedent to transfer ownership of Title 2 firearms upon death that would otherwise be Contraband and would have to be surrendered to the federal government if registered under the NFRTR in decedent’s name alone.
However, the question is whether a Gun Trust is actually a valid instrument. The Gun Trust is a mechanism to advantage a loophole in a law designed to regulate firearms, regulation of which may be said to be in the interest of public safety.
It concerns me that an argument can be made that a Gun Trust is designed to circumvent a federal law to protect the safety of the public, and therefore, is void. If void, and a transfer has occurred of a Title 2 firearm, can it be that the owner of the Title 2 firearm has made an illegal transfer and therefore is subject to criminal penalties and the recipient of the Title 2 firearm posses Contraband, subjecting him to criminal penalties?