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Gun Trusts: Not Just an Estate Planning Tool

Gun Trusts: Not Just an Estate Planning Tool

Over one-third of Indiana residents own firearms. While most of the firearms owned in Indiana are rifles, handguns, and other “Class II” firearms, some Indiana residents also own “Class III” weapons, including short-barreled shotguns and rifles, explosives, and suppressors. Sometimes a Class III weapon is an heirloom or part of a collection, and the owners wish to pass on those items. A gun trust can facilitate this process, without detriment to the rights of the weapon’s owner during his or her life.

The Bureau of Alcohol, Firearms, and Tobacco (“ATF”) regulates the transfer, possession, and use of all firearms, and has stringent rules for Class III weapons under the National Firearms Act. One of ATF’s rules includes obtaining approval from your local sheriff (or other Chief Law Enforcement Officer) before transferring possession or ownership of the weapon to someone else.

Historically, approval could be withheld for any number of seemingly arbitrary reasons. Additionally, the transfer of a Class III weapon typically involves a significant tax on the transfer. A gun trust is a special purpose revocable trust which is primarily used to make transfers easier, while minimizing taxes resulting from transfers.

As with most trusts, a gun trust will allow the items and money which are part of the trust to be given to selected beneficiaries outside of the estate of a deceased owner. The gun trust allows the owner of the weapon to designate how the weapon can be used, possessed, and passed on (with a few exceptions). It also allows the owner to designate any number of Trustees who can also have the same rights to the weapon as the owner, giving the Trustees certain rights to possess or use the weapon without the need to pay the additional tax for each transfer. The trust can be used to protect an entire collection (including Class II and Class III weapons) and the owner can create rules on how the trust can buy and sell weapons, allowing the collection to change and grow without worrying about collections of weapons going through an estate and under the eyes of the courts.

We are ready to help you protect your rights in your firearms. Call us at 317-825-5110 to speak to an experienced trust attorney.

This McNeelyLaw LLP publication should not be construed as legal advice or legal opinion of any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer on any specific legal questions you may have concerning your situation.

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