The huge target contained the outline of a human head and torso and hung on a retractable chain thirty feet away. My gun safety classmates, who included my oldest son, my son-in-law, and about ten other novice gun enthusiasts, were anxiously watching as I stepped to the line. I had fired a gun for the very first time about thirty minutes earlier – a wimpy 22 pistol. But now I was gripping a powerful weapon, the kind of thing that Dirty Harry might strap to his ankle. Since each of us was given only five shots with this cannon, we decided to watch each other. It was my turn.
I dutifully took the stance that I had just been taught, locked my arms, lined up the sights, and quickly fired off all five rounds. When the noise ended, the instructor immediately reeled in the target with a surprised look on his face. There was a single, large hole on the lower right side of the torso. Assuming that I had put all five bullets through this single hole, the instructor exclaimed “Great Job” and, on the spot, named me “One Hole.” The nickname stuck. My classmates affectionately referred to me as “One Hole” for the balance of our classes without ever mentioning what I suspected to be the real truth: that only one of my five shots actually hit the gigantic target.
Truth is, my primary interest in those classes was the opportunity to drink beer and eat ribs with two of my favorite people following each session. But I learned a lot. What most surprised me was the growing popularity of personal weapons.
Although our economy has been depressed for a long time, more and more Americans continually find serious dollars to exercise their Second Amendment rights. Gun sales are sky high and growing higher. There are now more than 258 million privately-owned firearms in the U.S., the highest of any country in the world, and firearm transactions have increased at an annual pace in excess of 10 percent since 2006. There are various explanations for this huge growth in popularity: a growing concern for personal safety; the threat of terrorism; a suspicion that law enforcement is getting weaker; a fear that future laws may complicate or prohibit gun ownership; more baby boomers with time to hunt; a desire to release stress by unleashing a powerful force at a pretend target; and more.
My gun education continued a few months later when one of my bright law school students, Scott Kitch, submitted to me a draft of a paper that discussed the value of using a special purpose revocable trust to own a gun or a gun collection. This paper enlightened me. So, with Scott’s permission, I have briefly summarized his points below, in hopes that they might help the planning process for those who now own guns or are considering joining the rapidly growing force of new gun owners.
A revocable trust can be established specifically to be the legal owner of guns possessed by a person or a couple. This is not a tax play. Since the trust is revocable, it’s a tax nullity and will not trigger any income, estate or gift tax consequences. There are four potential non-tax advantages for using such a gun trust as the legal owner.
The first advantage is that a trust greatly simplifies the registration and licensing requirements of a Title II weapon – a machine gun, a short-barreled rifle or shotgun, a sound suppressor, or a destructive device. Unlike the next three advantages, this first advantage is unique to Title II weapons. Now you may reasonably ask, as I did, do people actually buy such weapons? It’s amazing. Ownership of Title II weapons has increased a startling 460 percent since 2005. And with a Title II weapon, a trust is a no-brainer.
An individual desiring such a weapon must provide fingerprints and a photograph and obtain the signature of a Chief Law Enforcement Officer – a chief of police, sheriff, state police head, district attorney or prosecutor. This signature requirement can be a serious obstacle in most states. None of this is required with a trust. Trust ownership eliminates the need for fingerprints and photographs and wipes out the signature requirement. It’s a giant loophole in the law that nearly all Title II buyers jump on. One large gun retailer advised me that 98 percent of his Title II sales are made to trusts.
The second advantage is that trust ownership promotes privacy. Trusts are not public documents. And on the death of a person who uses the trust’s guns, there is no disclosure of gun ownership because the trust assets (the guns) pass outside of probate.
The third advantage is that, in some states, a trust devoted exclusively to gun ownership may help insulate other assets from certain potential liabilities and risks inherent with gun ownership.
Finally, and perhaps most importantly, a carefully drafted gun trust may facilitate the smart and safe transition of a gun in the event of a death or a serious incapacity. The trust can be used as a tool to exercise some control from the grave and to help insure that a dangerous weapon does not pass to a person who is inadequately trained. In addition to laying out specific requirements for managing the use, storage and legal requirements of the guns, the trust document may require successor trustees and users of the guns to complete gun safety courses and take other specific steps to protect against the kind of ignorance and carelessness that may lead to a gun disaster.
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