Gun Trust Loophole Closing in July
Gun Trusts are an attractive estate planning tool for many gun owners for a variety of reasons. First, after the gun owner's death, the trust can provide an organized mechanism for disposition of firearms, ensuring they pass to the desired persons (who can safely handle them). Second, during the gun owner's life, the trust can provide a comprehensive mechanism for who is able to use the firearms and when. Third, for certain firearms, they can provide a degree of privacy for who can use such firearms.
This year, the Bureau of Alcohol, Firearms, and Tobacco (ATF) proposed several amendments to 27 C.F.R. 479 which have become final and will take effect on July 2, 2016, eliminates the third benefit. Certain firearms regulated under the National Firearms Act (NFA) require verification and approval of all users. Now, trusts with NFA firearms registered to them will have obtain approval of the grantor, trustee, and all "responsible persons" who have rights to use such firearms. Thus, the privacy benefit of such trusts has largely been eliminated. There is still time for clients to register such trusts prior to the effective date of the rule on July 2, 2016.
Full text of the rule change can be found here: https://www.atf.gov/file/100896/download