Trusts and the New Anti-Gun Laws
The primary use for the Trusts I create is for holding NFA-regulated items. Most people use them for suppressors. A few use them for SBR’s and even fewer use them for fully-automatic weapons.
With Colorado’s latest round of anti-gun legislation, the question of placing non-NFA-regulated items in the Trust keeps coming up. As with most legal questions, it’s tough to come up with an answer to post on a bulletin board that will survive scrutiny and be accurate and applicable to the majority of folks who read the post.
A couple of weeks ago, I put together a very detailed analysis of the “large” capacity mag legislation and the universal background check legislation. Between the 2 documents, I used up a little over 13 pages. Rather than publishing them immediately, I put them aside with plans to re-read and edit them before posting them on this site.
This brings me to today’s post. I’ve decided NOT to post the long analysis because it can still be parsed--the analysis can’t be applied to every situation which leaves me open to significant liability when someone takes a particular comment out of context or fails to realize that their particular set of facts changes the analysis completely.
So... What I’ve decided to do is publish this relatively shorter analysis and then answer questions as best I can.
Question 1: Should I place non-NFA-regulated firearms in a Trust to avoid the provisions of HB 13-1229.
My answer: NO.
Question 2: Should I place “large” capacity magazines in a Trust to avoid the provisions of HB 13-1224.
My answer: Probably.
My thought process on each answer:
Universal Background Checks
Loss of Exemptions
Most transactions people would hope to accomplish by using a Trust are already exempt from the background check requirement as the law currently stands. Putting the gun in a Trust might actually cause you to lose access to a few of the exemptions. Specifically, a Trust does not have immediate family members. Many of the exemptions allow transfers (temporary or permanent) to immediate family members.
Multiple Background Checks
For firearms held in a Trust, the law requires background checks for all people who are legally authorized to take possession of the firearm on behalf of the Trust. For the Trusts I create, this would include all present-day Trustees as well as any present-day co-Trustees. This would not include future Beneficiaries or backup Trustees until they actually have rights to possess the Trust’s assets. (i.e., when you die.)
This background check on Trustees is also an example of losing an exemption. Under the law, if you pass on a regular firearm through your will or in a Trust created WITHIN your will, the recipient is exempt from needing a background check. The Trusts I create are created present-day, NOT within your Will. If you’re interested, the generic legal term for a Trust created while you’re alive is “inter-vivos Trust.” The technical term for a Trust created within a will is a “Testamentary Trust.” In normal estate planning work, I frequently make provisions for a Testamentary Trust within the Will to take care of minor children.
“Large” Capacity Mags
As the law is written, you can’t buy or sell “large” capacity magazines after July 1, 2013. You can continue to possess this “large” capacity mags after July 1, 2013 so long as you’ve owned and maintained continuous possession of the magazine since prior to July 1, 2013.
We’ve all read the discussions re: what is meant by “continuous possession.” We all have our own ideas of what this means, but we really won’t know for sure until someone is prosecuted for failing to shower with their Magpul 30-rounder.
The reason I say you should “probably” put your “large” capacity mags into a Trust is this:
(1) When property is placed in a Trust, the Trust then OWNS the property.
(2) Current Trustees have authority to possess assets of the Trust.
(3) When the Trust is first created, YOU are the only current Trustee. You can add co-Trustees at any time. Any co-Trustee you add can possess the items of the Trust.
(4) When you die, whoever is named as backup Trustee is then assigned the task of managing the assets of the Trust. This includes taking possession of the Trust’s assets. OWNERSHIP of the Trust does not change. A TRANSFER has NOT occurred.
(5) In the Trusts I create, the backup Trustee has the option of terminating the Trust or continuing the Trust. If the Trust is continued, the Trustee can name co-Trustees and can name backup Trustees. This process can continue forever and a Transfer of ownership has not occurred.
(6) Continuing this logic, your unborn grandchildren could possess a “Large” capacity magazine in the year 2050 by acting as a Trustee to a Trust you created in 2013 because the TRUST has maintained continuous ownership and possession of the “large” capacity magazines since before July 1, 2013.
As others have pointed out, because magazines do not have serial numbers, it will be somewhere between difficult and impossible for government prosecutors to prove when you purchased any particular magazine. The problem would arise when your grandchild born in 2014 is found to be in possession of a large capacity magazine in 2035. There is no way this grandchild could have owned the magazine before July 1, 2013. Without a Trust, the only way a child born in 2014 could legally possess a “large” capacity magazine in 2035 is as a Trustee for a Trust created and funded prior to July 1, 2013.
As we’ve all said, both these laws have significant deficiencies in the form of unclear and unenforceable terms. If we continue on our current path, I fully expect our government leaders will begin to take away exemptions provided in the laws as the opportunity to do so presents itself. I also expect that any litigation concerning the legislation will be decided in favor of further restrictions.
Please don’t interpret anything I’ve said as encouraging anyone to break any laws. Please also don’t consider the above opinions as legal advice for your particular situation. The only way I can give legal advice is by first knowing your exact legal circumstances.
Rod
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