Why can't non-NFA firearms be put in a trust?

fred333 said:

Aren't members of the trust in possession of all firearms owned by the trust at the time the trust is enacted? If so, if that emergency legislation reclassifies the Scar 17 as an Assault Weapon, since the trust members're already in possession, wouldn't they be exempted?

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If you are being prosecuted for possession of contraband (drugs, AWs, etc.), the meaning of possession is this: Possession = some domination or control. Possession can be actual or constructive – sole or joint. It casts a very broad net. The State does not have to prove ownership to prove possession. However, ownership may be evidence of possession.

The grandfathering provision under the Code (and presumably future AW bans) exempts those who lawfully possessed the AW prior to the enactment of the ban. In a trust, the trustee holds legal title to property while beneficiary holds an equitable interest. These are legally recognizable interests / rights to the trust property. Property interests do not necessary = possession, however, they may be evidence of possession. There are 2 different concepts at work. There may be overlap, but not necessarily.

In many trusts agreements the beneficiary is specifically excluded from having any control over the trust property. Take this example: An elderly owner of a small motel has a special needs child. He places the motel in trust naming the child as sole beneficiary. Upon the owner’s death, the trustee will operate the motel for the benefit of the child, making period distributions of income for the child’s welfare. However, the child has no right to control / operate the motel. This child / beneficiary has an interest to that property, however the child does not have any domination or control over the property (no possession).

Probably most gun trusts are drafted so that the trustee(s) are permitted to possess the NFA item while the beneficiaries are not. Hypothetical: Today we have one of these typical gun trusts. There are 2 trustees and one beneficiary. Only trustee #1 has actually handled, fired and stored the weapon. Trustee #2 is an out-of-state buddy who wants to play with the NFA stuff next time he is town. Now tomorrow new legislation is passed reclassifying the trust property as an AW (and it containes the usual grandfathering provision). Besides trustee #1, who can lawfully possess the trust property? Can the concept of constructive possession be extended to grandfather trustee #2?

Do you guys see how this can get complicated? The ownership concepts at work in the law of trusts just don’t dovetail well with the concepts of possession at work in a criminal prosecution for possession of contraband.

Couldn't you just do a corporation and get around that?

fabsroman said:

Rusty Shackleford is still an IP. However, his Forum name has been changed to The Gun Law Digest and his screen name has been changed to Lex Armarum. I have an e-mail in to him, which he said he will respond to in depth later tonight.

I really do think that the main answer is to keep Assault Weapons and other regulated firearms (i.e., handguns) out of a trust because of the transfer/possession issue and the inheritance issue. One could argue that passing a firearm upon death via a revocable trust, which becomes irrevocable upon death, is an "inheritance", but I doubt my brother in-law wants to be the first one to argue that and I really do not feel like do a ton of research on this matter. Much easier just to leave those firearms out of the trust and draft a Will.

The question becomes whether non-regulated, non-NFA firearms should be in a separate trust, or whether they can be put in the same trust as the NFA items.

I'll let you guys know if Rusty Shackleford (n/k/a Lex Armarum) has anything further to add.

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I was wondering what happened to Rusty. THanks for the update.

Anyone get any further info on this subject?

The amount of disinformation revolving around this is confusing. When I first got a Trust, the Attorneys brochure said to put all Firearms into it, then, he said...oh your in MD. Only do the NFA items. Now, several years later he says ( after me asking ) you can put your non regulated arms in their because no paperwork is required, but do not do pistols or AW rifles. He is referring to already owned items. I can see how today, transfering an already owned banned rifle to your trust may be impossible simply because the law ( BS281) prohibits transfers of banned items. No way around this one other than to SBR your weapon, transfer it to your trust, then you can interchange barrels at will from whatever (11.5) back to the govt profile 16 inch, or just do a 14.5 if you like the long barrel. An expensive solution at $200 per transfer, but a workable solution to getting an un transferable weapon, transferred into your Trust, if that is important to you for estate planning purposes. It may be worth it to the individual. Since the item is already registered with the MSP, no real reason to worry about it being registered with BATFE.

A previous comment in this thread states that MSP won't allow it because the can't do a background check on a Trust. This is a fuzzy matter because in MD, when you transfer ANY NFA item into a Trust, they will not release the item in question to the Trustee in question without running a NICS check on the spot for the individual leaving the store with said item. Also, machine guns have to be registered with the State Police. So, that's not a valid argument for MSP to make. I'm not saying that will stop them from saying that. The other fear some have is that by putting non NFA firearms into your Trust, you are exposing them to the risk of losing them if you break an NFA law and your NFA items are confiscated. For one, if you break an NFA law, it's possible that your losing all your guns anyways, legally, anyhow. Two, a good trust is designed so that the only things the ATF have record of being assigned into the Trust, are the NFA items you register with BATFE. You should not be providing BATFE with an all inclusive list of what's in your Trust outside of NFA items. Between these two matters, it seems to make that valid concern, less likely to become an issue.

From an estate planning point of view, it is almost senseless to have a gun trust AND own guns outside of the Trust if you intend on passing those along as it makes your Trust worth less ( not worthless ) just worth, less. And, it means that whatever guns are being handled by your will, in probate, are on display ( figuratively) for the Court and others to see what you owned, and who you are leaving it to, it also becomes public record as a will is public information, so forget about any discretion. Or privacy. That, is one of the many benefits of a Trust. The Privacy, with Firearms inheritance, privacy is a big issue to most.

I would be interested to hear the reasoning behind having two trusts, one for NFA and one for non NFA, that was mentioned in this thread. There may be a great reason for that.

It would be great, to once and for all have the definitive answers on this, if such an answer exists.