Texas Gun Trust – Effective Planning For Beneficiaries
A Texas Gun Trust is customarily a revocable trust which can be changed or ended at any time during the grantor’s lifetime. The formation and requirements of the trust are governed by section 112.001 et. seq. of the Texas Property Code. The Texas firearms trust is established for the benefit of the beneficiaries. Their treatment is therefore important.
Gun Trust Texas: Objectives
Since a Texas NFA trust is intended to hold Class 3 items such as machine guns and suppressors good planning mandates that the trust last as long as possible. One object of the trust is to maintain continuity of ownership through several generations. This avoids unnecessary transfers upon the deaths of the grantor and some of the beneficiaries.
Texas Firearms Trust: Duration
Section 112.036 of the Texas Property Code limits the duration of Texas trusts to not more than “21 years after some life in being at the time of the creation of the interest, plus a period of gestation”. In order to maximize the time a trust is in effect, its termination date should be based upon the life of a young individual, preferably a minor, plus 21 years. The author uses a termination date of 20 years after the last of the named beneficiaries to die in order to fall within these parameters. To accomplish this, a Texas NFA Trust could provide that the trust terminate after the deaths of the grantor, his spouse, their specified children and their specified grandchildren, plus 20 years.
NFA Trust Texas: Documentation
The extended life of a well-planned Texas gun trust raises other issues, including who will run the trust after the grantor and his spouse pass away and what record-keeping and documentation is necessary for the trust so that the beneficiaries at the termination of the trust can know and understand its property which they are about to receive. It is therefore vital for a Texas NFA trust to provide for successor trustees and a process for the selection or appointment of trustees when all of the named trustees die, become incapacitated or fail to serve. The original trust along with the original ATF Forms 1 and 4’s and Bills of Sale should be kept and maintained together in a safe place. It is advisable to make a trust inventory and update it periodically with serial numbers and prices and/or values. A young beneficiary of the trust estate at the end of the trust might have no concept of the nature and the value of the items which are to be distributed to him. Adequate record-keeping will assist the beneficiaries in not only determining the nature and extent of the trust estate but may also assist in providing descriptions of trust assets which can be used in researching their values.
Texas NFA Gun Trust: Exemption From Seizure By Creditors
Because trust beneficiaries’ assets may be subject to claims of creditors or subject to partition in a divorce, it is essential that a Texas gun trust contain a spendthrift clause. Such a provision, permitted by section 112.035 of the Texas Property Code, can be used to shield a beneficiary’s interest in a trust from his or her creditors, including a bankruptcy trustee. Nevertheless, this section cannot be used by a grantor to shield his own assets placed into a trust from his creditors. Such conduct is prohibited.
A well-planned Texas NFA trust is essential not only to its administration, but also for the needs of the beneficiaries. Their best interests should be considered when drafting the trust.