Gun Trusts – Buyer Beware

With the advent of suppressor use for hunting and hog extermination, the use of gun trusts to acquire NFA items such as suppressors and machine guns in Texas has risen exponentially.  Many class 3 dealers offer gun trusts at discounted prices as do “fill-in-the-blank” internet paper mills which offer no proper guidance or competent legal advice.  Similarly, a cottage industry of inexperienced so-called “gun trust lawyers” has arisen who promise gun trusts at discounted prices which seem “too good to be true”. These are all gun trust sources which should be avoided.

NFA Trust – Estate Planning Device

A gun trust is an estate planning tool which should be prepared after careful review by a competent and experienced lawyer.  There is too much at stake to place valuable assets in a problematic or defective trust.  You should be able to speak with the lawyer drafting your nfa trust. The draftsman should understand what you want to accomplish by the trust and make suggestions based upon his or her experience.  Most persons purchasing a gun trust know little about the process or the pitfalls involved.  This makes them vulnerable to unscrupulous gun trust sellers.

Non-lawyers:  Bad Advice

One local gun shop in San Antonio sells a fill in the blank trust forms.  It tells the customer that he needs a separate trust for each suppressor or other NFA item.  This of course is not true.  Any number of NFA items may be placed in a gun trust.  A gun shop may not give legal advice or advise you how to fill out a gun trust form.  This is the unauthorized practice of law and violates Texas law and the laws of most states.  Nevertheless, many websites run by non-lawyers offer this service.  This type of clandestine unlawful activity often results in the drafting of invalid trusts.  Often innocent looking blogs on popular websites offer this illegal service.

Poorly Drafted Trust:  May Be Fatal

Many of such “shop made” quickie trusts have the NFA buyer designate himself both as the sole trustee and sole beneficiary.  This is specifically prohibited by Section 112.034 of the Texas Trust Code.  In such case the Trust Code provides, “. . . a trust is not created and the transferee holds the property as his own.”   The invalid trust results in an invalid NFA transfer to the trust.  Such invalid trust and the possession of an improperly transferred NFA item also raise serious criminal issues.   Other out of state lawyers, not licensed in Texas, often mislead Texans into purchasing gun trusts believing they are dealing with an experienced Texas lawyer when the identity of any Texas lawyer is not disclosed on the website as required by Texas law.  Avoid such persons.  Know with whom you are dealing before you hire a professional.  Make sure you are dealing with a licensed Texas attorney and not a non-lawyer.

Avoid Too Short Duration Trusts

Another San Antonio gun shop offers discounted trusts prepared by its lawyer for customers.  The author reviewed the form and to his horror discovered that such discounted trust ends with the life of the grantor and requires the distribution of all NFA items at such time.  A gun trust should last several generations to keep and preserve its assets “in the family” for as long as possible.  Instead, the discounted gun shop trust, forces distribution and $200.00 tax per NFA item on termination.  It creates the need for new trusts for the unsuspecting heirs to lawfully acquire their distributions of NFA items from the trust in too short a period of time.  This is a profit center for unscrupulous lawyers who may have failed to advise their clients that the trust could and should have been drafted to last as long as possible within the bounds of Texas law (at no extra charge).

Trust Should Last for Generations

A Texas trust may not last longer than the duration of a life or lives in being (at the time the trust is made) plus 21 years.  See Section 112.036 Tex. Trust Code.  The gun trusts written by the author typically end 20 years after the death of the grantor’s surviving grandchild.  If the grantor has no children, then the duration of the trust can be measured by other relatives or friends’ lives with the ultimate distribution made to their heirs.  This is simple estate planning information which is often overlooked or by design withheld.  Many lawyers charge more for different levels of gun trusts, say purple, blue or green.  Why shouldn’t the trust be drafted correctly at the inception based upon sound legal advice according to the client’s needs and not like a three-legged chair which won’t support the weight of its intended user?  What should that extra leg cost? Or, should it be standard equipment?

Client’s Needs Come First

In order to draft a suitable gun trust the lawyer handling the matter must know the client’s needs and family history.  He must evaluate what the client needs and provide guidance and trust drafting skills to accomplish the desired result.  This takes time and attention. A lawyer’s time and attention costs money.  One must ask how a lawyer can economically devote sufficient time and attention in reviewing and analyzing a client’s trust needs and counseling him accordingly for a deeply discounted price.  The answer is he cannot. Corners must be cut.  Many lawyers will substitute secretaries or non-lawyer staff to review and prepare legal documents instead of the lawyer.  This may be acceptable if such staff are properly supervised and their work reviewed by a lawyer.  Often, this is not the case and non-lawyers do the work which the client believes is being performed by an attorney, when it is not.

Use Due Diligence in Selecting a Lawyer

Investigate the quality of the trust you are about to purchase and the credentials of the attorney drafting the trust.  Will he stand behind his work if the ATF challenges the validity of the trust at no charge to you?  This is the sign of a reputable attorney.  Like choosing a physician, make sure the professional you seek to employ is one you can trust who will act in your best interest.  Avoid the “one size fits all” canned trust. Have one drafted that is tailored to fit your needs. Do not sacrifice quality for price.  You or your heirs may have to pay more in the end to correct the problems with a poorly planned or poorly drafted trust.

About the Author
Martin Seidler is a practicing San Antonio, Texas, attorney with 35 years of experience.  He is a former member of the unauthorized practice of law committee of the San Antonio Bar Association.  He has drafted many wills, trusts and guns trusts over the years and has handled estate and trust litigation in state and federal courts.  He is a machine gun enthusiast and former small bore competition shooter.  He operates the www.guntrustlawyer.net website with his son Blake Seidler which provides information on gun trusts, nfa weapons and veterans’ affairs.