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A Note on Why I Draft Gun Trusts for My Clients

February 14, 2016 by Gregory 2 Comments

I thought long and hard about whether I should do my gun trust business on a different website and under a different trade name than the ones I use for my estate and business planning practice. I’ve noticed that many attorneys separate their gun trust work from their other practice areas for fear, I suppose, that they might scare off potential clients who are not interested in or even loathe firearms.

I decided to do all my business using the same website and trade name. Here’s why.

I draft gun trusts for two basic reasons:

1. Gun laws are complicated. Guns are assets, property that must be handled properly and carefully when the owner dies or becomes incapacitated. This is so because guns are regulated property and are therefore unlike virtually any other property people own. Violate one of the laws or regulations governing the transfer or possession of firearms–even unintentionally–and you or your executor or trustee could be in a fix. As an attorney who holds himself out as an estate planner, I feel an obligation to be knowledgable about and able to help my clients manage their firearms in their estate plans so my clients don’t find themselves in that fix. Moreover, since I represent clients in both Wyoming and Utah, this approach seems like a sensible plan to me.

2. Gun trusts promote safety. I believe gun trusts provide an extra layer of safety to gun owners and those who succeed them in ownership and therefore to the public. A trustee of a gun trust assumes a special or fiduciary obligation under the law when they manage firearms in a trust. The trusts that good attorneys draft make the parameters of that obligation crystal clear. The result, I believe, is better informed gun owners and improved public safety. If that’s actually the case, it only makes sense to draft gun trusts.

Of course, I could do all this without promoting my gun trust business on my estate and business planning website. I chose not to do that for two reasons: 1. Two websites are two times the work. Two trade names are twice as much to keep track of. 2. I want people who come to this website to know who they are dealing with. No surprises. I ask potential clients to disclose a lot when they work with me–that’s essential to good planning. It seems fair for me to be completely open with them as well.

Annie Hide Your Guns? Justice Scalia Has Died.

February 13, 2016 by Gregory Leave a Comment

Betty Hutton, as Annie, couldn’t get a man with a gun. Some are worried that they won’t be able to even use their guns if President Obama gets to appoint a new justice to the Supreme Court now that Justice Antonin Scalia has died. I don’t know if that’s a worry worth worrying about, even if President Obama makes that appointment. Members of the court–left and right–are loathe to overrule themselves. Sure it can happen, and guns may be the issue that causes them to do so. But first, any Obama appointment has to get through the Senate and Senate Majority Leader Mitch McConnell already says that ain’t gonna happen.

And so, I’ll just say that I’m going to miss Scalia. A lot. His humor. His writing. His intellect. No, he was not perfect as a man or as a justice, but he was good, very good on both counts. I was amazed at how the initial reports of his death stunned me.

So today, I choose not to get political. Instead, I want to praise the man. To that end and for your enjoyment and edification, I share this interview of him by Brian Lamb of C-SPAN:

Filed Under: 2nd Amendment, Bill of Rights, Firearms, Gun Trusts, NFA Trusts, Supreme Court, Videos and Audio Tagged With: guns, Justice Antonin Scalia, NFA firearms

When Something is Better Than Nothing: The Case for the Holographic Will

February 12, 2016 by Gregory Leave a Comment

Let’s be clear on this one point: If you don’t have a will, the state has one for you. That is, if you die without a will, your state’s law of intestacy will step in and make sure your assets go to someone. If you’re lucky, your desires will coincide with the state’s. If you’re lucky.

If you live in Wyoming, your assets will be distributed as follows, if there’s anything left after the payment of debts:

If the deceased leaves a spouse and children, then 1/2 to the surviving spouse and 1/2 to children or their descendants.
If the deceased leaves a spouse and no children or descendants of children, 100% to the spouse.
Likewise if the deceased leaves only children or descendants of children, i.e., 100%
No spouse or children? Then to father, mother, brother, and sisters or descendants.
Finally, to grandparents, uncles, and aunts. (Wyo. Stat. § 2-4-101)

If you live in Utah, well, it’s quite different:

The entire intestate estate goes to the surviving spouse if the deceased leaves no descendants or if all of the surviving descendants are also descendants of the surviving spouse.
If some of the deceased’s surviving descendants are not also descendants of the surviving spouse, the the spouse gets the first $75,000 and 1/2 of the remainder. (Utah Code §75-2-102)
What’s left, goes first to the descendants of the deceased per capita–i.e., three children? Each gets 1/3rd.
If no descendants, then to the deceased’s parents, then to descendants of the parents (i.e., bothers and sisters), then to the grandparents, etc. etc. (§75-2-103)

It’s a little more complicated than what I’ve just described, but the broad outline is there. What isn’t there is the ability to disinherit or direct more money to one child than to the other. Nor is there the ability to prevent a spouse from whom you are separated but not divorced from receiving the surviving spouse’s share. Have a charitable bone in your body? Out of luck.

So what do you do if you don’t like the state’s plan for you? Make your own plan: draw up a will, using an estate planning attorney, I hope.

But if money or time is really short; if you’re in a pickle and need a will right now, this very minute, an attorney might not be an option. A holographic will might solve your problem. According to Dictionary.com, a document is holographic if it is “written wholly in the handwriting of the person whose signature it bears.” A holographic will is just that, with minor tweaks, depending on where you live.

If you live in Wyoming, a holographic will, to be valid, must be “written entirely in the handwriting of the testator and sign by the hand of the testator himself” (Wyo. Stat. §2-6-113).

If you live in Utah, such a will is valid if the “signature and material portions are in Testator’s handwriting” (§75-2-502(2)).

In neither case are witnesses necessary.

Thus, if you’re in a pinch, pick up pen and paper and write out your will. Tell the world how you want your property distributed should you die suddenly. Then sign it and put it where someone will find it. Tell someone about it. Then, once the emergency passes and you have more time and money, give an attorney a call and get it done right.

Filed Under: Estate Planning 101, Wills Tagged With: holographic will, intestacy, intestate

Employee Background Checks: Be Careful Out There

February 11, 2016 by Gregory Leave a Comment

Here’s an interesting podcast about the do’s and don’ts of employee background checks under the Fair Credit Reporting Act or FCRA. Enjoy now and avoid problems later.

Filed Under: Business Planning, Human Resources Tagged With: background checks

A Suggestion or Two on Going into Business with a Friend

February 11, 2016 by Gregory Leave a Comment

You and a friend think you want to go into business together. Maybe you’ve even decided as much–or are at least pretty comfortable with the idea. You feel compatible with one another. He has talents you don’t have. You have talents he doesn’t have. Together you would make a great team. Or would you?

May I make a few suggestions about what you should do before you ink a deal that puts your time, money, and reputation on the line with this would-be partner? And can I say that what I’m about to tell you applies whether or not the potential partner is your brother or sister, your best friend or recent acquaintance, a man or a woman?

1. Act like a banker. If you were going to take out a loan with your local bank, your loan officer would want a loan application, a balance sheet and income statement. She’ll want your last two or three years of tax filings. In some cases, she’ll want a cash flow statement. She’ll pull a credit report. If she’s good, she’ll check you out four ways from Sunday, and finally–if you’re lucky–she’ll have you sign on the dotted line–on the line at the end of a loan agreement and probably on a line at the end of a collateral assignment. And she’ll have some confidence that you’ll pay the loan back because she’s checked you out so thoroughly.

Should you or can you be so thorough with your potential partner? Yes. And he should be with you as well. I know of someone who was about a year into a partnership when he first learned that his partner hadn’t filed his personal income taxes for five years. A couple of years later the tax man (actually woman) descended on the delinquent partner and the firm’s business. The result was ruinous for him and very damaging for the partnership. So, act like a banker and know who you’re dealing with.

2. Go trippin’. Want to know your partner even better? Go on an extended trip with him or her. Doesn’t have to be far, but it should be for at least a week and require you to spend much time together in all sorts of situations, situations that will expose his and your irritating habits. By the time you return, you’ll know how he handles money, whether he’s a penny pincher or a spendthrift. You’ll have a better idea of his character, whether you can trust him to tell the truth or count on him to lie, even about the little things. And you’ll be in a better position to decide if that partnership is such a good idea.

3. Be clear and realistic about profit sharing. Before you go too far, make sure you both are clear about how profits will be distributed. I was partners with my brothers in an insurance agency years ago, an agency where the income flowed completely from commissions. Before we joined forces, we settled on a compensation scheme that we all thought was fair and which we hoped would avoid hard feelings. Basically, we decided to split all commissions three ways. We did this for reasons I won’t go into here. What we didn’t think hard about enough was whether that split would incentivize good work habits, whether it would get us all out the door and seeing the people. I know we all assumed that we would all work equally hard. To put it mildly, that was unrealistic of us.

We were three almost completely different persons. One of us was a great life insurance salesman, an area of relatively high commission per sale. Another was more interested in selling investments, an area where commissions per sale tended to be smaller. And me, I fancied myself a salesman, but I was more of the technician, the behind-the-scenes guy who designed the cases and made sure the details were taken care of. In other words, though are commission split was good in theory–the theory that said we were all going to sell a similar amount of insurance and investments–in practice it was very unrealistic. Problem was that once we started down that road, it was hard to change our arrangement. As a consequence, our partnership was not as profitable as it might have been. So, think about compensation and profit sharing really hard–and be realistic.

5. Vacations and other benefits that can bite you in the rear. As with profit sharing, be very realistic here. Take it as a given that you and your potential partner(s) will come to the table with different expectations about work and play, health insurance and 401(k)s, etc. etc. You all need to be up front and clear about your expectations. If you’re not, trouble will ensue. Count on it.

6. Family matters matter–to some more than others. You have promised your daughter that you’d never miss a single one of her volley ball games while she is high school. Your potential partner hasn’t attended a single baseball game his son has played in. See the problem? If your approaches to family differ significantly, you may want to think twice about going into business together. That should be obvious, but to some it is not.

I could go on and maybe will in another post, but you get the idea: Those planning to go into business with one another need to have multiple intimate conversations about some very important issues. All cards must be on the table before you commit time, money, and reputation to the proposed business venture. All of them. No secrets. None.

You’ll be happier and more successful in the end if that’s the case. Trust me.

Filed Under: Business Planning

Public Service Announcement: Drones? You need a license for that?

February 10, 2016 by Gregory Leave a Comment

The Federalist Society has a short video up titled, Drone regulation: Commercial v. Recreational use? that you may want to watch, especially if you’re, well, flying drones. It’s short. Just over 2 minutes. Enjoy.

Filed Under: Uncategorized Tagged With: drones

Practicing Law without a License: What Could Go Wrong?

February 10, 2016 by Gregory Leave a Comment

So a relative just gave me a blank copy of her parents’s will and trust, documents prepared for them by a financial planner, a guy not licensed to practice law. I have no idea what this guy knows about financial planning. I know that he knows very little about wills and trusts. Here’s a short list of problems with the documents:

1. Both documents are simple, fill-in-the-blank forms. How do I know that? The blanks. I have no idea whether the financial planner guy discussed with his clients the who, what, where, and why of filling in those blanks. For example, both the will and the trust provide spaces for appointing executors, guardians, and trustees. Was any discussion had about who should occupy those positions and why–maybe–they should not?

2. And about that guardian. The article in the will providing for the appointment of a guardian speaks only of acting on behalf of “a minor child.” The clients are both in their 80s. Obviously, the will was prepared especially for them–not!

3. The will gives the impression that the executor has the power to administer the clients’s estate with little or no court supervision when, in fact, state law grants that power, but only if the size of the estate does not exceed certain maximums. In Utah, that maximum is $100,000. The provision is misleading and, frankly, unnecessary, especially given that the clients’ home is worth at least $400,000, well in excess of the $100,000 maximum for informal probate in Utah or $200,000 in Wyoming. In such cases, the law already allows a simplified probate variously called informal probate, unsupervised probate, distribution by affidavit and summary procedure, and the like. My impression is that the will in question makes a big to-do about this “power” so as to appear like it’s actually accomplishing something beyond wasting paper.

4. In Utah a will is valid if it is in writing, is signed by the testator (the husband), and is witnessed by two competent persons. In Wyoming, the requirements are virtually the same, though the witnesses must also be disinterested. This will has that, plus an affidavit that the testator is also supposed to sign and which, apparently, needs to be witnessed by three witnesses–and all these signatures are supposed to be acknowledged before a notary public. This is overkill masquerading as thoroughness and an indication that this is a one-size-fits-all-states document. Worse, the affidavit is poorly written. To wit, it says.

I sign and execute this instrument as my Will . . . (emphasis supplied)

Which instrument would that be? Arguably the affidavit. Since the affidavit is a separate document and because it refers to just any “Will” and not to the “Last Will and Testament of Joe Blow,” the word “instrument” is ambiguous and virtually worthless.

5. By the way, I see no “Last Will and Testament” for the wife. She is referred to in the title of the trust, but only by first name! The same goes for the signature line at the end of the trust.

6. The will is a so-called pour over will, a document that essentially directs that all property the testator owns at the time of his death goes into a trust, either a testamentary trust (one created by the will and which comes into existence at his death) or an existing living trust (a trust he created during his lifetime and which he’s been using while he’s alive). In this case, the trust is a living will. So far, so good. But here’s the problem: it is not apparent that anything has been done to ensure that the testator’s property has been transferred to the living trust. If that’s the case, then there will be formal probate and the living trust is of no value until the testator dies. NO VALUE.

7. And when he dies? Well, the trust has some value at that point, but just some. I’ll be brief:

a. The lifetime dispositive provisions–the directions on income and property while both grantors are alive–are minimal and leave a lot to the imagination.

b. The directions on what happens upon the death of the first-to-die are even more unclear and attempt to do a few things that I’m not sure you can do. Can a trust become irrevocable at the death of the first-to-die, but only as to certain property? I don’t think so. What should happen–and what often happens under a well-drafted trust–is that at death a separate trust is created for that property and that trust is irrevocable. The provision in the trust in this case is a mishmash of gobbledygook.

c. The provisions regarding specific distributions of personal property or financial assets is likewise poorly drafted and confusing. To boot, the provisions introduces new terminology that is not defined elsewhere in the trust. As trustee, I could guess, but could I be sure that I’m doing the grantors’ bidding when such ambiguity exists?

d. There is no discussion of marital deduction, applicable exclusion amount, portability, basis or other potentially estate and income tax saving concepts.

I could go on. Did he even talk about durable powers of attorney? About health care directives? The list of potential problems is endless, bu I’m going to stop here. The closer I read the documents, the madder I get. And that’s without contemplating the very likely fact that little or no counseling took place when the financial planner handed this garbage to his clients.

The grantors/testators paid good money for this mishmash of words, money they may never get back. As a person licensed to practice law in Utah and Wyoming, I have my differences with the whole idea of licensing, but what I’ve just described is a big argument in the other direction.

And so, dear reader, CAVEAT EMPTOR. Buyer beware. Better yet, simply don’t buy. You can do as well as this guy by yourself. But when it comes to wills and trusts, you can do a lot better by talking to a licensed attorney, particularly one who practices in the area of wills and trusts. Trust me.

Filed Under: Administration, Estate Planning 101, Probate, Trusts, Wills Tagged With: unlicensed practice of law

Earlier Retirement?

February 2, 2016 by Gregory Leave a Comment

An intriguing article on the aging judiciary on our federal courts, including our Supreme Court. I’m actually not sure where I stand on this issue. I’ve listened to many Supreme Court arguments and read my share of Supreme Court opinions over the last 40 years, and the justices impress me as pretty with it, even Justice Ginsberg, the oldest on the court. She does seem slower in asking questions, but her questions are generally good.

That said, I do like the idea of other federal courts following the lead of the 9th Circuit and mandating regular mental and physical health exams. Though given that the 9th Circuit has historically been the most reversed of the Circuit Courts, such exams may not work as well as advertised. Or, maybe they do, and the Supreme Court should implement them.

Interesting times.

Filed Under: Supreme Court Tagged With: Breyer, Ginsberg, Scalia

Shipping Firearms: It’s Complicated

February 1, 2016 by Gregory 1 Comment

What follows is an attempt to clarify a confusing area of firearms law–the issue of private, unlicensed persons mailing firearms. There’s a lot of misinformation out there about whether an unlicensed person–that is, a person without a Federal Firearms License or FFL–can mail or ship firearms to another unlicensed person. Before we attempt to cut through the confusion, we offer this little caveat: the discussion below does not take into account state firearms laws, which vary. What follows concerns federal law.

So, can an unlicensed person mail or ship a firearm to another unlicensed person without an FFL as an intermediary?

Short Answer

Legally, yes, if intrastate. Practically . . . it’s complicated.

Longer Answer

Legally, an unlicensed person in, say, Wyoming, can ship a firearm to another unlicensed resident of Wyoming, so long as the transferor “does not know or have reasonable cause to believe the transferee is prohibited from receiving or possessing firearms under federal law” (B1 and B7, pg. 197, ATF Federal Firearms Regulations Reference Guide, 2014 (Reference Guide); see also the citations to the USC and the CFR at B1 and B7). In other words, unlicensed persons or non-FFLs can legally ship firearms INTRASTATE to other non-FFLs. However, if that same unlicensed transferor wanted to ship that same firearm to someone in Utah or Florida–that is, INTERSTATE–s/he would have to ship the firearm to an FFL in Utah or Florida. The law and commentary I’ve cited above is pretty clear on this point–though apparently not to everybody.

Where things get confusing is on the practical side. Practically speaking, if we’re talking about shotguns or rifles–long guns, if you will–a Wyoming resident can mail to a Wyoming resident without an FFL. If it’s a handgun, though, that unlicensed person in Wyoming is probably going to have to ship the gun to an FFL in Wyoming as well–or have a face-to-face meet up with the buyer/transferee–because, as I said, it’s complicated.

You see, there’s the USPS and then there are common carriers like Fed-Ex who service the public at large and contract carriers like trucking companies who service a short list of clients. The Reference Guide says common or contract carriers can transport handguns; the USPS can’t.

Title 18 USC §1715, the law governing the US Postal Service and firearms, is quite explicit. Except in very limited circumstances,

Pistols, revolvers, and other firearms capable of being concealed on the person are nonmailable and shall not be deposited in or carried by the mails or delivered by any officer or employee of the Postal Service. (Emphasis added)

However, our unlicensed person can mail shotguns and rifles to another unlicensed person in the same state via the USPS, subject to certain requirements. Both the ATF (see B6, pg. 197 of the Reference Guide cited above) and the USPS give thumbs up to the process. And handguns? Well, the AFT says that “a common or contract carrier must be used to ship a handgun” whether it’s INTRASTATE to an unlicensed person or INTERSTATE to an FFL (B7, pg. 197 Reference Guide).

Unfortunately (or fortunately, depending on your point of view) at least the large common carriers are not so willing participants in the shipment of firearms–handguns or long guns. Both Fed-Ex and UPS clearly state that they will only ship if an FFL is at the receiving end, regardless of whether the shipment is INTRASTATE or INTERSTATE.

Of course, Fed-Ex and UPS are not the only common carriers around. Check your local listings. If you find another, probably smaller or local carrier, they may allow an unlicensed person to ship both handguns and long guns to an unlicensed person who lives in the same state without the FFL intermediary. The law allows them to that. The question is do their internal policies? You’re going to have to ask around.

Contract carriers, trucking companies and the like? That’s a concern for another day.

One more point worth noting: Transfers between unlicensed persons that go through an FFL are subject to background checks–with few exceptions. Thus, given that

at least the larger common carriers require that all firearm shipments–intra and interstate–between unlicensed persons go through an FFL,
the USPS doesn’t ship handguns at all and requires interstate shipments go through an FFL,
Federal law requires that all interstate transfers between unlicensed persons go though an FFL,
even simple transfers–no money exchanged–between residents of different states must go through an FFL, and
at least 18 states and the District of Columbia require all or most intrastate transfers between unlicensed persons go through an FFL,

few firearms transfers legally escape background checks. And that includes online purchases through online outlets like Gunbroker.com that cater to private sellers. In fact, as explained in the Reference Guide:

An unlicensed person who is not prohibited from receiving or possessing firearms may purchase a rearm from an out–of–State source, provided the transfer takes place through a Federal rearms licensee in his or her State of residence. (B3, pg. 197)

Yes, some do escape and fall into the wrong hands. The law is not the only ass, after all.

To this end–the end of keeping firearms out of the hands of asses–the ATF encourages federal firearms licencees (FFLs) to work with private sellers to facilitate background checks on private buyers (see page 175-176 of the Reference Guide for more). Not a bad idea, especially if you–the private seller–are worried about bona fides of a potential buyer. Could save you and someone else a lot of heartache.

How about shipping to yourself? Well, as they say, that’s different. Federal law–remember, we’re talking only about Federal law–says that you can ship interstate to yourself for your own use to engage “in hunting or other lawful activity,” but according to question B8, pg. 198 of the Reference Guide:

The package should be addressed to the owner 1in the care of’ the out–of–State resident. Upon reaching its destination, persons other than the owner may not open the package or take possession of the firearm. (emphasis added)

Likewise, a gun owner moving from one state to another may “may transport or ship the firearm interstate” and if using a moving company, “must notify the mover that firearms are being transported” (B9, pg. 198).

And NFA firearms? Do the same rules apply? Of course, if any of the firearms you want to ship or transport are of the NFA variety, then you “must have prior approval from ATF.” The prior approval process does not apply to suppressors/silencers, by the way (CFR §478.28).

Filed Under: 2nd Amendment, Firearms, Gun Trusts, NFA Firearms, NFA Trusts Tagged With: common carrier, contract carrier, guns, NFA firearms

Death Certificates: For Those Who Won’t Take Your Word That Your Loved One Died

January 29, 2016 by Gregory Leave a Comment

Your loved one has died, and you discover that you are the personal representative or executor of his or her will. What do you do now? Well, possibly the first thing you should do is order the death certificates; you’re going to need them–in spades:

To file an estate tax return–if necessary.
To prove to the life insurance company that the insured has died.
To transfer ownership of cars, trucks, boats, and any other titled vehicle.
To the bank.
To a creditor.
Etc. etc. etc.

Order multiple copies, maybe 10 or more. Though some will be satisfied with a copy of a death certificate, many will not, and if you don’t have an original at hand, things come to a stop. So place ordering death certificates at or near the top of your to-do list.

In Wyoming, go to the Office of Vital Statistics at the Wyoming Department of Health. The cost is $10.00 per certificate.

In Utah, go to the Office of Vital Records of the Utah Department of Health. The cost is $18.00 per certificate.

Filed Under: Administration, Wills Tagged With: death certificate, executor, personal representative