Gun Trust

By Richard C. Rahnema of Watchel, Biehn & Malm

The ownership of firearms in Arizona is part of our culture. In the last decade the ownership or possession of federally prohibited firearms through a trust has increased significantly. The National Firearms Act of 1934 (NFA) restricts the ownership of Title II, Class III firearms: machine guns, short barreled shotguns, short barreled rifles, destructive devices, suppressors/silencers and "any other weapon." However, these types of weapons can be owned in Arizona. 

Who can own these NFA firearms?

Individuals, business entities, and trusts are permitted to purchase NFA firearms in Arizona. The transfer of NFA guns requires registration with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). This process requires an application along with payment of $200.00 for a tax stamp before a purchaser can take possession and ownership.

What is a Living Trust?

You can think of a trust as your own private company that owns substantially all of your assets. As trustee of your trust, you have 100% control over the assets. When you die, the trust document creating your trust provides who takes your place as the successor trustee and where those assets are distributed. This successor trustee immediately has control of the assets in the trust estate without going to court to get that authority. In most cases a trust administration will have no court or lawyer involvement. The purpose of a general revocable living trust is to avoid probate. See wbmlaw.com for more information. 

What is a Gun Trust?

A gun trust is a separate entity specifically created to hold ownership of your NFA firearms. The trust is revocable; therefore, you are free to make changes or revoke it at any time.  This allows you to retain complete control of the firearms while you are alive and the flexibility to choose who will be the beneficiaries after you pass. 

Why create a Gun Trust? 

There are several advantages compared to individual ownership. The Gun Trust is not considered an individual; therefore, it is not required to comply with certain criteria in the application process with the ATF. Because the Gun Trust is a separate legal entity, it is not required to provide passport pictures, a background check and obtain the local Chief Law Enforcement Officer’s signature acknowledging you will be possessing the NFA gun.  Most dealers perform the background check on the trustee even though they are not required to. The Gun Trust can reduce the hassle and the wait time to receive your tax stamp from the ATF.  The Gun Trust also provides the ability to set up a specific plan if something happens to you. Applying as an individual, means only that individual will be entitled to possession of the NFA gun. If you become incapacitated or pass away, the firearm cannot be possessed until that person obtains a stamp from the ATF.  Additionally, another benefit is the option to keep the firearms in the family trust and leave a legacy.

Do I need a Gun Trust to obtain prohibited firearms?

No. An individual may obtain a NFA firearm in Arizona if he/she obtains a passport photograph, background check/ fingerprint card and the CLEO's signature. 

Can I put my NFA guns in my revocable living trust?

Maybe, it depends on the language of your trust. It is suggested to create a trust specifically for NFA items. 

Do you need to hire an attorney to create a NFA Trust? 

No, but is highly recommended. There are websites, software programs, forums, and templates online; however, the price difference is usually not worth the risk of an error. 

Will the law change? 

The ATF has proposed a change to the current law. There were more than 9,500 comments to this proposal, but the ATF is supposedly going to issue their decision in May 2015. As this article is published, the law could change. You can Google "ATF 41p" for more information. 

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