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ScottyXbones
09-13-2013, 3:01 PM
I was wondering if any attorneys could weigh in on this.

With pending legislation that would turn a vast majority of guns into "assault weapons" and force registration of guns and their respective owners, would it be worth it to place your guns in a trust?

The legislation will also make certain long guns non-transferrable, so a trust would be a way to keep it in the family.

Since all gun transfers must be done through a dealer, how would they run a background check on a trust? And what would the process be to "fund" the trust with the guns?

Thanks in advance!

Tincon
09-13-2013, 3:22 PM
Not an attorney- but I'm not sure a trust will accomplish anything with respect to future transferability of AWs. I would be interested to hear any such legal theory.

guntrust
09-16-2013, 3:19 PM
There are a number of ways in which a gun trust MAY help.

Please call with any questions not answered by my video, articles etc

desertexplore
09-16-2013, 3:23 PM
Tagged. Link to the above mentioned video?

-me
09-16-2013, 10:04 PM
So... We would have to set up and transfer any soon to be assault weapons into the trust before the first of the year?

I think I'm going to have to start this. I'm hoping to be able to pass on some decent firearms to my kid, before they restrict us all down to slingshots :(

dblcross121
09-17-2013, 1:54 PM
I was wondering if any attorneys could weigh in on this.

With pending legislation that would turn a vast majority of guns into "assault weapons" and force registration of guns and their respective owners, would it be worth it to place your guns in a trust?

The legislation will also make certain long guns non-transferrable, so a trust would be a way to keep it in the family.

Since all gun transfers must be done through a dealer, how would they run a background check on a trust? And what would the process be to "fund" the trust with the guns?

Thanks in advance!


Hopefully we can get some meaningful discussion here because this is a potentially huge question for anyone who owns a semi-automatic rifle in California.

The problem -as I understand it - is that your guns cannot be registered in the name of the trust. Rather, they have to be transferred to the individual trustee, who then holds the guns "in trust." In most cases, the trustee would probably be yourself, which creates a problem in the future when you die. That's because the guns must be transferred to the new trustee, which would be a violation of SB 374 because the gun is non-transferrable (as well as not registered in the new trustee's name).

Can anyone chime in on this?

mrdd
09-18-2013, 3:51 AM
I don't see how a trust could help in most situations. Note that I am not an attorney, but I have served as a trustee in the past.

A trust is not a magical entity, in fact in most respects, it is nothing more than a contract which outlines how assets are to be handled. The trust language itself is private, it is not registered with the government.

There are 3 main parties to a trust. You have the person or persons who possess certain property or assets and set up the trust, they are called the grantor(s) or settlor(s). They create the trust with the help of an attorney and they sign the trust document in the presence of a notary public who affixes their seal to the document.

The second parties are the beneficiaries. The property or assets are held for their benefit, and depending on how the particular trust is drawn up, they can receive income from the property or assets during the life of the trust, and once the trust terminates, receive title to the property or assets as specified by the trust language.

The third party is the trustee, sometimes there is more than one. The trustee is tasked with possession and control of the property or assets as specified by the trust language for the beneficiaries. Title to the property or assets is held by the trustee, acting under the terms of the trust. They are responsible for managing the property or assets, making sure that the terms of the trust are followed, and that the beneficiaries receive any income generated by the trust property or assets, and title to the property or assets once the trust terminates. The trustee is also responsible for filing any tax returns for the trust property or assets and notifying the beneficiaries of their tax liability based on any income generated by the trust property or assets.

Now, what happens if the trustee relinquishes their role due to death, or any other reason? The trust language specifies one or more successor trustees who can assume the role. When this happens, the property or assets need to be transferred to the new trustee so they can assume control.

Here is where things gets sticky. In the case of registered AWs, the property cannot be legally transferred to another party from the person initially registered. So, if a trust is set up by the end of 2013, the property could be registered and transferred to the initial trustee, but not to any successor trustee or beneficiary unless the property is moved out of the state and possessed there.

So, a trust cannot help you retain possession inside the state.

Tincon
09-18-2013, 1:23 PM
I would be very skeptical of anyone trying to sell you on a trust. Especially if they are making statements suggesting that a trust may help with laws like the most recent AW statues. Particularly when those laws have not really even been around long enough for anyone to be sure what they really mean. More so if that person is is not willing to state publicly how the trust would be of benefit. Very skeptical.

CAL.BAR
09-18-2013, 2:12 PM
OK meaningful discussion here from a genuine trust/firearms atty:

I have been having my clients create IRREVOKABLE trusts to transfer their "potentially soon to be"AW's into. The theory is thus.

Guns, like cars, have both registered owners and legal owners. If you buy a car, you are the registered owner, but if you have a lien from the bank on it, the bank is also the legal owner of the vehicle.

Guns have a legal owner, but also a registered owner. Most times that is the same person. But not always. Movie and prop guns are owned by the studios or large prop houses (i.e. corporations) however, CA law does not allow them to be the registered owner. So you have some officer or director of the company to whom all those guns are registered, but that person is NOT the legal owner.

We know (if history is any guide) that the gov. will ban the transfer of these rifles - including through inheritance. OK but .... if you transfer the rifles into an irrevocable trust prior to the law taking effect, you have the argument that the legal title right then and there went irrevocably to the trust and that you (as the first trustee) would only be the registered owner - with a possessory interest, but NOT a legal interest and thus are not the legal owner. Therefore, after you die, (presumably after the law goes into affect) and when you transfer the rifles to the next trustee (your kids for example) you are NOT transferring legal title or ownership b/c that has already gone into the irrevocable trust. At that point you are only changing the registered owner. The problem is that the word "transfer" is not defined in the law so we don't know how courts will interpret the word when the issue gets to court. (and it WILL get to court someday.)

The general legal perception of when a transfer occurs for personal property is when OWNERSHIP passes - not possessory interest (like when you consign a gun to be sold or send it to be worked on or loan it to a friend etc.) So the argument can be made that when LEGAL title passes is when a true "transfer" takes place.

What I am telling my clients is that the trust may not help, but it certainly won't hurt b/c you will be planning for their care and disposition after you die. Otherwise, they (as basic personal property) will simply go to your next of kin etc. under inheritance law. It may not help, but then again, if you don't have them in a trust, you can't make the argument. You can't play the lottery if you don't buy a ticket.

PM's welcome on this topic.

Tincon
09-18-2013, 2:31 PM
Can you give me some legal authority to the effect that a trust, as opposed to a trustee, can hold legal title to property?

11C ABN
09-18-2013, 2:46 PM
Questions since you asked.

What is the cost?

Is the cost multiplied per child - example is cost set for only one child with additional charge per child?

Is the cost more if you live in different areas of the state? example cost more if you live in Los Angeles - Vs Central Valley?

Cost rise per weapons? specific handgun - revolver - hunting rifle - simi auto hunting rifle - evil black rifle?

Additional cost if over certain amount? 1-4 then 5-10 then 10 to 20 etc etc?

using the plainest English - simple type speak - could you answer in kind. will explain in follow-up. Thanks in advance.

11C ABN
09-18-2013, 2:47 PM
Questions since you asked.

What is the cost?

Is the cost multiplied per child - example is cost set for only one child with additional charge per child?

Is the cost more if you live in different areas of the state? example cost more if you live in Los Angeles - Vs Central Valley?

Cost rise per weapons? specific handgun - revolver - hunting rifle - simi auto hunting rifle - evil black rifle?

Additional cost if over certain amount? 1-4 then 5-10 then 10 to 20 etc etc?

using the plainest English - simple type speak - could you answer in kind. will explain in follow-up. Thanks in advance.

guntrust
09-18-2013, 5:47 PM
http://lawnews.tv/index.php/2013-06-16-00-37-54/138-will-a-gun-trust-protect-my-guns-if-sb374-becomes-law

hardlyworking
09-19-2013, 4:54 AM
OK meaningful discussion here from a genuine trust/firearms atty:
...
Nice CAL.BAR! Thanks for taking the time to explain.

GM4spd
09-19-2013, 6:25 AM
The key word is "MAY". Pete

guntrust
09-19-2013, 7:39 AM
OK meaningful discussion here from a genuine trust/firearms atty:

I have been having my clients create IRREVOKABLE trusts to transfer their "potentially soon to be"AW's into. The theory is thus.

Guns, like cars, have both registered owners and legal owners. If you buy a car, you are the registered owner, but if you have a lien from the bank on it, the bank is also the legal owner of the vehicle.

Guns have a legal owner, but also a registered owner. Most times that is the same person. But not always. Movie and prop guns are owned by the studios or large prop houses (i.e. corporations) however, CA law does not allow them to be the registered owner. So you have some officer or director of the company to whom all those guns are registered, but that person is NOT the legal owner.

We know (if history is any guide) that the gov. will ban the transfer of these rifles - including through inheritance. OK but .... if you transfer the rifles into an irrevocable trust prior to the law taking effect, you have the argument that the legal title right then and there went irrevocably to the trust and that you (as the first trustee) would only be the registered owner - with a possessory interest, but NOT a legal interest and thus are not the legal owner. Therefore, after you die, (presumably after the law goes into affect) and when you transfer the rifles to the next trustee (your kids for example) you are NOT transferring legal title or ownership b/c that has already gone into the irrevocable trust. At that point you are only changing the registered owner. The problem is that the word "transfer" is not defined in the law so we don't know how courts will interpret the word when the issue gets to court. (and it WILL get to court someday.)

The general legal perception of when a transfer occurs for personal property is when OWNERSHIP passes - not possessory interest (like when you consign a gun to be sold or send it to be worked on or loan it to a friend etc.) So the argument can be made that when LEGAL title passes is when a true "transfer" takes place.

What I am telling my clients is that the trust may not help, but it certainly won't hurt b/c you will be planning for their care and disposition after you die. Otherwise, they (as basic personal property) will simply go to your next of kin etc. under inheritance law. It may not help, but then again, if you don't have them in a trust, you can't make the argument. You can't play the lottery if you don't buy a ticket.

PM's welcome on this topic.

CAL.BAR you are conflating the concepts of legal title and equitable ownership. A merely equitable owner does not control the property. (In the case of the corporation you mention, the corporate entity controls the employee.) However muddled the penal code is on corporations, there is clear decisional law in California holding that a trust is not an entity. Only the trustee has legal title.

The "irrevokable" (sic) trust you mention may help against a Feinstein-type bill that attempts to place all of our weapons under the NFA (where trusts are treated as entities), and a revocable trust with dynasty provisions can do many great things, but most people do not want to give up control of their weapons so an immediately irrevocable trust is premature in most cases.

You state that "transfer" is not defined but Estate of Heggstad covers this pretty well if you read it. A so-called "transfer" into trust is not really a transfer if a grantor "transfers" to himself as trustee, but there is definitely a transfer when title is vested in a new trustee.

In asset protection planning, we are accustomed to using cutting-edge (or bleeding-edge) techniques, in good faith but untested and grey, which at least have some settlement value. However, one must be very careful in this area of gun trusts to avoid putting clients and their family members in jeopardy of their liberty. (Everyone is so focused on the transfer issue, they forget the biggest benefits of a properly drafted, purpose-built gun trust are prevention of accidental felonies, and multi-generational training.)

For my $.02 on how a gun trust can help against SB274, read:
http://lawnews.tv/index.php/2013-06-16-00-37-54/138-will-a-gun-trust-protect-my-guns-if-sb374-becomes-law

I include gun trusts free of charge with all estate plans, because that is the best way to hold guns, for lots of reasons (see video). If you are looking for something cheap and magical, with no commitment, go see a paralegal in the red light district. If you are serious about carrying on the firearm legacy and other values important to your family, get solid planning from an attorney under a maintenance program so you know it will work when you need it. Planning is a cost of doing family.

guntrust
09-19-2013, 7:49 AM
For my $.02 on how a gun trust can help against SB274, read:
http://lawnews.tv/index.php/2013-06-16-00-37-54/138-will-a-gun-trust-protect-my-guns-if-sb374-becomes-law



plus $.03 on SB374 :p

Tincon
09-19-2013, 11:42 AM
a trust is not an entity. Only the trustee has legal title.

You state that "transfer" is not defined but Estate of Heggstad covers this pretty well if you read it. A so-called "transfer" into trust is not really a transfer if a grantor "transfers" to himself as trustee, but there is definitely a transfer when title is vested in a new trustee.


That is is my understanding as well. Which is why this was of some concern:

OK but .... if you transfer the rifles into an irrevocable trust prior to the law taking effect, you have the argument that the legal title right then and there went irrevocably to the trust and that you (as the first trustee) would only be the registered owner - with a possessory interest, but NOT a legal interest and thus are not the legal owner.

My $.02: If you are going to set up a trust anyway for estate planning purposes (and there may be good reason to do so if you have significant assets), and you own guns, you should absolutely go to a competent lawyer that understands how firearms will affect the trust.

BUT, I am still HIGHLY skeptical of lawyers charging money to set up trusts for the primary purpose of working around state laws prohibiting transfer of guns/magazines. At best they are going to help make sure the guns are transferred to someone out of state on your passing. They will not allow for new AW registrations after the registration period is closed. If that is what you are looking for, you would be better off donating the money to a group trying to overturn these laws.

mtsul
09-19-2013, 2:25 PM
Good info I'm interested in getting one going for a few firearm related reasons

guntrust
09-20-2013, 5:54 AM
At best they are going to help make sure the guns are transferred to someone out of state on your passing. They will not allow for new AW registrations after the registration period is closed. If that is what you are looking for, you would be better off donating the money to a group trying to overturn these laws.

That is the main reason we are in the situation we are in.

Too many of us rely on "groups" to carry on the legacy rather than taking responsibility to plan for our families. "Groups" are important (and BTW, there are many ways a gun trust can benefit your favorite gun org), but only the family (YOUR family) can be trusted with carrying on our sacred firearm legacy.

Again, the benefits of having a gun trust go way beyond the transfer issue everyone is focused on--anyway, who among us will retire in this state if legislation like this is enacted? Even while living here in Orange County, most of my serious training has been done out of state, at Front Sight, which in the past has offered lockers and may do so again. Even if your guns must ultimately be transferred to family out of state, isn't it better to keep those under your control after your death, under terms you set down in your trust, in order to benefit your family even if it's just, for example, during an annual vacation of firearm training under required performance standards? Throwing money at a "group" especially in California will not accomplish much compared to training your descendants.

As for protecting those implementing your plan, as well as beneficiaries, against commission of accidental felonies, doesn't the rationale for a purpose-built gun trust fortified with instructions to clueless fiduciaries (and even more clueless attorneys they may consult), apply a fortiori when you are dealing with assault weapons?

Final point :oji: The LESS money you have, the MORE important estate planning is. Your family is depending on you and if you fail to look at all the options with all the attorneys out there offering free consultations (free two-hour design meetings in my case, statewide, by skype if necessary), you are committing fraud against a family that trusts you to provide responsibly.

Your firearms will rust, and so will you. The real GUNS are your KIDS. Train them to shoot, train them to build guns in the basement, and don't rely on word of mouth to pass on the legacy.

e90bmw
09-20-2013, 10:51 AM
One thing to remember is that they are trying to do away with corporations owning guns. This may well effect the way a trust can own a gun.

guntrust
09-20-2013, 11:07 AM
One thing to remember is that they are trying to do away with corporations owning guns. This may well effect the way a trust can own a gun.

A trust cannot own a gun because a trust is not an entity (except under NFA).

Last time i looked at that bill it did not deal with trusts at all.

Again, a trust is simply an arrangement between individuals. (Yes, corporations can serve as trustees but we haven't seen many banks rushing in to the gun trust administration business.)

Tincon
09-20-2013, 11:43 AM
I'm not sure it makes any sense to say that supporting gun rights groups is "the main reason we are in the situation we are in." I'd say without those groups things would be a lot worse. I also think it's very possible some of these laws (including "AW" laws) will go away through legislation.

That said, you raise some good points about the value of a trust.

My issue is that many people think the trust will allow them to transfer registered AWs to their kids/relatives in state (essentially bypassing this provision of the AW laws). Attorneys should not be taking advantage of this misperception in order to sell trust services.

meaty-btz
09-20-2013, 11:52 AM
A trust cannot own a gun because a trust is not an entity (except under NFA).

Last time i looked at that bill it did not deal with trusts at all.

Again, a trust is simply an arrangement between individuals. (Yes, corporations can serve as trustees but we haven't seen many banks rushing in to the gun trust administration business.)

Can a Corporation own firearms, regardless of trust? Serious question. Not officers of the corporation, the Corporation. According to SCOTUS a corporation is an entity.

So if the AWs and all the firearms were owned by a corporation, then that would allow perpetual ownership between generations of CEO's as long as the corporation remains in tact.

Yes/No?

I am not talking about a trust here, just purely a corporation of one type or another, C/S/LLC/etc. I know that there are corporations that own weapons that would be AWs in California, private corporations. Even more they have arsenals with corporate owned pistols and rifles, and AR type rifles. So this is a very serious question.

chainsaw
09-20-2013, 12:34 PM
According to SCOTUS a corporation is an entity.

Where did they say that a corporation is an entity with all the rights and obligations of a natural person?

11bravo1p
09-24-2013, 10:56 PM
So how about this scenario:
I live in CA and my nephew(Afghanistan and Iraq combat vet, not a kid) lives in WA. My nephew and I create an NFA trust where my nephew is the Grantor and he and I are both beneficiaries. On Schedule A of the trust he puts his Sig716 and Socom scout and I put my BB equipped LAR-15 or soon to be RAW if 374 is signed. I keep my LAR-15 in CA and he keeps his load out in WA.
Problem?

In addition, if he decides to buy a suppressor in the future and gets it approved via form 4 with a stamp, and amends it to Schedule A. Is this a problem as long as the CA legal firearms stay in CA and the WA/NFA legal suppressor stays in WA?

NFA is Federal so I would think that as long as state laws are obeyed in relation to the individual type of weapons, we should be fine? That would make it worth it to me to go thru the NFA trust process because I would still get to use the cool stuff while visiting Washington state and can still keep my CA RAW in CA.

Thoughts?

guntrust
09-25-2013, 5:21 AM
So how about this scenario:
I live in CA and my nephew(Afghanistan and Iraq combat vet, not a kid) lives in WA. My nephew and I create an NFA trust where my nephew is the Grantor and he and I are both beneficiaries. On Schedule A of the trust he puts his Sig716 and Socom scout and I put my BB equipped LAR-15 or soon to be RAW if 374 is signed. I keep my LAR-15 in CA and he keeps his load out in WA.
Problem?

In addition, if he decides to buy a suppressor in the future and gets it approved via form 4 with a stamp, and amends it to Schedule A. Is this a problem as long as the CA legal firearms stay in CA and the WA/NFA legal suppressor stays in WA?

NFA is Federal so I would think that as long as state laws are obeyed in relation to the individual type of weapons, we should be fine? That would make it worth it to me to go thru the NFA trust process because I would still get to use the cool stuff while visiting Washington state and can still keep my CA RAW in CA.

Thoughts?

I won't answer your question specifically here, but during the course of the free two-hour design meeting i offer (to those who fill out my lengthy questionnaire), if needed i describe how a purpose-built gun trust can be administered in mutliple states, complying with transfer rules of each state as well as federal law. Fairly routine stuff.

[BTW, i am also licensed in WA]

11bravo1p
09-25-2013, 8:02 AM
Understood, I wouldn't give up something of value for nothing either, especially when it relates to your profession and my personal liberty. I appreciate you taking the time to read and to consider our specific goals and needs.

From your response it sounds like the answer is that it is possible, legal and routine. Just make sure to take the correct route and go thru you or another competent lawyer familiar with 18 U.S.C. and the CA/WA PC to comply with all of the related laws, especially since this scenario consists of multiple jurisdictions. We will be taking that route.

Thanks for the feedback.

guntrust
09-25-2013, 8:38 AM
Understood, I wouldn't give up something of value for nothing either, especially when it relates to your profession and my personal liberty. I appreciate you taking the time to read and to consider our specific goals and needs.

From your response it sounds like the answer is that it is possible, legal and routine. Just make sure to take the correct route and go thru you or another competent lawyer familiar with 18 U.S.C. and the CA/WA PC to comply with all of the related laws, especially since this scenario consists of multiple jurisdictions. We will be taking that route.

Thanks for the feedback.

That is certainly part of it, but also keep in mind these are complicated fact-sensitive issues and there is no way really to give good legal advice in a forum like this. (Everyone should keep this in mind.) Specific legal advice requires a lot of education in both directions, starting with the lawyer learning about you.

Can't tell from your profile where you are located, but i will have a wall table at the Del Mar gun show this weekend. (In the past, i've set up mainly at the Costa Mesa show, but i'm adding Del Mar as a regular show.) If you are in the neighborhood drop by, or just call 1-888-WAY-WILL