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Sticking to Your Guns: Accounting for firearms in an estate plan

An estate plan is designed to ensure a smooth transition of assets from a decedent to beneficiaries, as well as minimizing expenses, fees, and taxes associated with the transfer. Most estate planners may be concerned with the transfer of real property and other substantial assets, but what may be overlooked is the way in which a decedent’s firearms are accounted for. Failure to properly account for these items may produce unwanted results, all the way up to excessive fines and even prison time.

Laws and Restrictions

From the outset, federal law clearly states the issue with regard to certain types of federally regulated firearms:

“It shall be unlawful for any person—

(d) to receive or possess a firearm which is not registered to him in the National Firearms Registration and Transfer Record; or

(j) to transport, deliver, or receive any firearm in interstate commerce which has not been registered as required by this chapter;”[1]

These types of weapons, regulated by the National Firearms Act (“NFA”) and which include fully automatic weapons and sawed-off shotguns, have strict prohibitions and restrictions on transfer in certain cases and can create potential criminal liability of up to ten years in prison and a $250,000 fine for violations. Prohibited possession can be actual or constructive, and this particular law is enforced with a zero tolerance policy as a means to prevent these types of firearms from falling into the hands criminals. Owners of these NFA firearms, however, may have a sentimental attachment or a personal history with them that the law does not take into account.  

gunKentucky state law provides few restrictions on the transfer of non-NFA firearms, although it does prohibit the transfer of a firearm when the transferor knows the recipient is prohibited from possessing it under state law.[2] The federal prohibition on transfer of certain firearms should be enough to give one pause when creating an estate plan, and estate planning should take into consideration not just federal law or Kentucky law, but also laws of other states where beneficiaries may live. (Note: there is a federal prohibition on direct transfer of a firearm from a resident of one state to a resident of another, but there is an exemption when the firearm is transferred as the result of a bequest or intestate succession.)

Estate Planning Considerations

With these laws in mind, it becomes clear that certain beneficiaries may be ineligible to receive a firearm bequest at the time of the decedent’s death, so there are ways that estate plans should take this into consideration. Estate plans should name alternate recipients of firearms in case a beneficiary cannot legally take possession of them at the time of the decedent’s death.

Firearms heavily restricted by the NFA can only be transferred through a very arduous and lengthy process, and the improper transfer of these weapons can lead to the aforementioned fines and jail time. In practice, this process is nearly impossible at times if local law enforcement will not cooperate with the certification process. Also, as noted earlier, constructive possession of an NFA firearm can lead to criminal penalties as well, so beneficiary possession of a premises where he or she might have access to an unauthorized NFA firearm may be enough to put him or her at risk for financial penalties or even jail time. This means that the executor of the estate should immediately register all previously-registered NFA firearms to her- or himself, and turn over any unregistered NFA firearms to law enforcement, as these cannot be registered retroactively by the estate.

A much simpler route for estate planning concerning NFA firearms is the creation of a gun trust. Such a trust meets the definition of an individual under the NFA, so the trust can legally hold the firearms and provide guidance to the trustees and beneficiaries on how the assets of the trust should be distributed. It also allows any trustee to lawfully possess the firearms, and it eases administration and transfer of the firearms after the death of the grantor.

The attorneys at McBrayer can assist you with estate planning to make sure that your firearms reach their intended beneficiaries, including the preparation of a gun trust to comply with federal and state laws. Contact us today!

Services may be performed by others.

This article does not constitute legal advice.

[1] 26 U.S.C. § 5861.

[2] KRS 237.070, KRS 527.040.

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