Seven Types of Gun Trusts

Here is a quick overview of seven major types of gun trusts:

1. Trust Mill NFA Trust: This is a “simple” (sometimes shockingly simple) “cookie-cutter” type boilerplate trust designed for purchase of firearms and/or suppressors regulated under the National Firearms Act (NFA). NFA items include machine guns, short-barreled shotguns, short-barreled rifles, suppressors, and broad category of weapons called Any Other Weapon (AOW). I’ve seen extremely skimpy trust forms given out free of charge by Class 3 dealers in order to facilitate sale of NFA items. I strongly advise caution with these trust mill forms. Something you download free or cheaply on the internet may not even be a valid trust in your state, in which case you could face stiff criminal penalties under NFA, which provides for strict liability crimes not requiring the element of intent. Firearm laws are very state specific and may be quite complicated. You must comply with not only NFA (Title II), but also Title I, Gun Control Act (GCA) and all federal, state, and local laws. Too many issues are missed with these simple forms. If you feel you must use a simple form, I would recommend contacting a WealthCounsel attorney who can provide a Bronze-level GunDocx trust. The Bronze version is designed to be simple, but is a step up from other cookie-cutter mill-type trusts. There is also a Silver version of GunDocx which allows a bit of customization, but I never use Bronze or Silver, only Gold (see below), and I only use that for my clients in TX or WA. I rarely recommend NFA trusts to my clients in California, and GunDocx (even Gold) is a poor template for California.
2. GunDocx (Gold Version) NFA Trust by WealthCounsel: WealthCounsel is the nation’s leading network of estate planning attorneys, a network that includes many top NFA planning attorneys across the country. Developed by WealthCounsel founding principal Dennis Brislawn, the Gold version of GunDocx is truly the gold standard when it comes to NFA trust drafting software. GunDocx has been improved over the years through input from attorney members, led by Brislawn. This is my go-to for drafting NFA trusts for my TX and WA clients. As noted above, I rarely recommend NFA trusts to my California clients. And GunDocx (even Gold version) is not drafted well to deal with California gun laws. The section provided in the software for adding reference to state laws is not sufficient and major revisions are required. Although GunDocx (Gold version) claims to plan for non-NFA firearms as well as NFA items, my approach for several reasons is to keep the two separate. So while there is a place for GunDocx (Gold version) in satisfying NFA planning needs of my TX and WA clients, I would never use GunDocx (Gold version) for non-NFA firearms, no matter what the state.
3. Firearm-Capable Revocable Living Trust (FC-RLT): Most gun trusts are in fact revocable trusts, and “revocable living trust” (RLT) is a redundant phrase meaning the same thing as “revocable trust”. The difference here is that this RLT is the one used for the family’s basic foundational estate planning, yet it is modified to be “firearm capable”, that is, capable of distributing firearms outright upon incapacity or death. At this basic level — outright distribution, which is all that most people want when it comes to firearm planning — there may not be any need for complicated planning, depending on which state is involved. In California however, firearm transfer rules are such that special planning may be required even for something as simple as avoiding probate (see video below). Depending on the attorney, an FC-RLT may be drafted with additional provisions for preventing “accidental felonies” due to non-compliance with gun laws.
4. Firearm Instruction and Responsible Stewardship Trust – RLT version (FIRST-RLT): This is the most common way I draft gun trusts. The FIRST-RLT (a/k/a FIRST Family Trust) is capable of transferring firearms like an FC-RLT, and in California that means including special planning to deal with California’s uniquely oppressive firearm transfer laws (again, see video below). It can also include provisions aimed at preventing “accidental felonies”. But the FIRST-RLT goes beyond all this to incentivize firearm training of beneficiaries and successor trustees using lifelong continuing subtrusts, cascading through generations and perhaps including additional dynastic planning. In addition to firearm training, the FIRST-RLT incentivizes transmission of other values (e.g., Life, Fortune, Honor) important to growing the family’s power over time. You cannot do all of this in a separate, standalone trust designed to hold only guns, which is why serious gun planning usually involves customization of the basic foundational RLT.
5. Firearm Instruction and Responsible Stewardship Trust – ILT version (FIRST-ILT): This is essentially the same as the FIRST-RLT, except that it is an Irrevocable Living Trust created during life for greater leverage in asset protection and tax planning. The large lifetime gift that funds this trust may also provide a huge boost for values transmission goals, and can be quite effective in getting beneficiaries on board with the family mission while you are still living, increasing the likelihood of planning success over multiple generations. Usually done with larger estates, often leveraged with life insurance.
6. Health and Education Exclusion Trust (HEET): These are complicated and require inclusion of a charitable beneficiary, but for wealthier estates, the HEET can be powerful because there is virtually no limit to the health and education exclusions. There is even a revenue ruling on point with a HEET set up for a martial arts school. The HEET can be an ILT, or it can be created under an RLT.
7. Firearm Temporary Divestiture Trust (FTD Trust): This trust is carefully drafted under state and federal law (see Henderson v US) so that grantor completely divests himself from all ownership, possession, and control, of all firearms and ammunition, for whatever period of time is required. For example in California so-called 5150 cases, where someone is placed on psychiatric hold for 72 hours, result in a five year prohibition, as do certain felony/misdemeanor “wobblers”. Some violent misdemeanors carry a ten year prohibition under California law. These trusts are drafted so that the grantor eventually gets the guns back, without having to pay a ton in storage fees.