As more lawyers begin to dabble with Gun Trusts we are seeing many who do not understand firearms and their unique nature which can often involve criminal penalties related to the improper transfer, possession, and use related to firearms or ammunition.
While it is fine to transfer a pair or sox, coins, most personal property to your trust without doing anything other than assigning it, the transfer of restricted items like firearms or ammunition is a different matter. If you can sell a gun to an individual in your state without going through a dealer you should be able to transfer a firearm to your trust without going through dealer. This is the case in most states.
In a few states like California, Colorado, Connecticut, DC, Illinois, Iowa, Maryland, Rhode Island, Massachusetts, Michigan, Nebraska, New Jersey, New York, North Carolina, and Pennsylvania where all personal transfers of some or all firearms must go through a background check, there may be no exception for transferring a firearm to a trust even if it is your own trust. Sure an argument could be made that there is no transfer and as such you should not have to go through a dealer, but why would one take the risk.
Several lawyers in California have recently been having discussions over such a topic. They even suggest that a transfer to a joint trust could be problematic because there are multiple owners. While a Gun Trust with multiple owners can be problematic, it is not for this reason.
In order to be valid, a Gun Trust must be funded, which involves transferring some property into the trust. The discussion between several California lawyers introduces an interesting question: Would it violate the California statute if you owned a firearm separately from you spouse, and then tried to transfer the firearm into a trust that named your spouse as a co-trustee or co-settlor?
While several of the lawyers point out, certain transfers are exempt under the statute. The exempt transfers in California include transfers between members of the same immediate family, including spouses. The transfer of a grantor's property to himself, as trustee of his own trust, is not considered a transfer. So, a couple that jointly owns a firearm, and transfers that firearm into a trust that names both parties as co-settlors, would not really be a "transfer." This is really just a declaration of trust.
On the other hand, as the discussion continues, a firearm owned separately by one spouse would have to be transmuted to community property before it could be transferred to a trust with co-settlors in order to comply with the statute.
While California may have such exemptions involving trusts it is not clear how they apply to firearms or if the legislative intent of the laws may change the interpretation of transfers to a trust when dealing with the transfer of firearms. This is why in jurisdictions where private transfers are required to go through a dealer, we always recommend doing so in order to comply with governing statutes. It is better to be safe than sorry.
One exception might be where someone owned a pre ban firearm as an individual and wants to put the pre ban firearm in their trust to maintain ownership and possession where it would not otherwise be permitted. This situation might justify the expense necessary for a proper determination on the subject. For most people, the relatively minor cost of using a dealer to transfer a firearm makes the decision easy.
Additionally experienced Gun Trust Lawyers® know that firearms rights are very important to our clients. They do not want others who may be involved with the trust to be able to take away the firearms or their ability to use them. It is for this reason that we draft our trusts with special powers for the Settlor. It is foreseeable that a multi-settlor trust could create a conflict of interest amongst your clients.
While we have stated many times that any valid trust can purchase or own firearms, it is issues like these that make it clear that a regular trust should not be used to purchase Title I or Title II firearms. If you are married, or live in a state that have many restrictions on firearms, legal support by a local Gun Trust Lawyer® is important. You will also find that the experience of the lawyer in dealing with Gun Trusts is important.
We have been drafting Gun Trusts for 6 years and have drafted over 5000 Gun Trusts across the United States. If you would like more information on a Gun Trust in your state, just fill out the contact us form on this website and we will send a free report on Gun Trusts.