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Some Things I Learned Answering Questions on a Forum for Asking Legal Questions

March 19, 2016 by Leave a Comment

Yikes_2016-03-07_0843So I sometimes forget that everybody’s smart, just on different subjects. For example, I don’t know much about physics. My teachers tried, but my head could only hold so much gravity and speed of light and such. Well, today I was online in an online forum where non-lawyers posed legal questions to attorneys. These were real life people experiencing real life problems that involved the law in some way or the other.

Now let me be crystal clear: I don’t think these people are dumb. To repeat: we are all “smart,” just on different things. I happen to know a lot about the law, but boy am I at a loss about some other subjects (heck, even about some legal subjects). With that, here are a few things I learned while answering questions:

  1. Many, if not most people, don’t realize that estate taxes are no longer a concern for most of us. Did you know that you and your spouse must be worth almost $11 million before the tax man comes knocking? Yes, you may need to do some planning to make sure you take full advantage of that $11 million threshold, but still.
  2. Many people don’t realize that the First Amendment doesn’t protect them from employers, friends, parents, and the like from infringing on their free speech rights. No, the First Amendment protects us from the government infringing on our rights. And even then the right is not absolute.
  3. More than a few people confuse a living will with a plain old will, also known as a last will and testament. A living will is a document that tells your family and doctor whether you want life support and such should you become incapacity and unable to speak for yourself. A will or last will and testament is what you use to appoint guardians for your children and to give your property away when you die. You can read more here.
  4. A lot of people–especially people down on their luck financially–aren’t aware of the legal resources available to them that are free or at a reduced cost, nor are they aware of the state agencies that might be of help to them–child protective or family services, for example. For the record, in Wyoming you can go to the Wyoming State Bar to find free or reduced-rate legal services. In Utah, you should go here.  In Wyoming, you can find child and family services here.  In Utah, you’ll find them here.
  5. Finally, too many people are way too quick to pull the trigger; that is, they get angry and immediately shout “Medic!!!” I mean, “Lawyer!!!” To those I say, try to work out your problems by yourself and amicably first, especially if it’s family, then resort to the law. But the corollary to that is, if the proper response is legal, then hire an attorney. Trust me on that one.

Now where do I go to find out how fast the speed of light was back in the days of horse and buggy?

Filed Under: Advance Health Care Directive, Asset Protection, Bill of Rights, Business Planning, Contracts, Decanting, Estate Planning, Estate Tax, Family Business, Firearms, Health Care Power of Attorney, Living Will, LLCs, Power of Attorney, Probate, Stepfamilies, Taxes, Trusts, Utah, Wills, Wyoming

Why Not Use My Revocable Living Trust as a Gun Trust?

March 18, 2016 by Leave a Comment

Question Mark_YellowI just took a call from a fellow who asked a very good question: Why not use my revocable living trust as a gun trust? The short answer to that question is, “because.”

But if that’s too short for you, here’s a longer version I gave him–in bullet points:

  • Guns are not like virtually any other property. They are regulated. Those regulations come with stiff fines and possible imprisonment if you should accidentally violate them. Gun trusts take that into account. Regular trusts don’t.
  • To transfer your home or your bank account, it’s a relatively simple matter of signing a deed or changing the name on the account. You don’t have to worry about who the transferee is and what he’s been up to lately. To transfers any firearms, you always have to be worried about what the transferee has been up to recently or even way back when because if he’s been up to no good, he could be a “prohibited person,” and you could get into trouble for selling or giving your gun to him.
  • Transferring–giving or selling–an NFA item is even more problematic. With each and every transfer, there’s fingerprints, photos, forms, signatures, and the like AND a $200 tax AND a long waiting period before you can actually, physically transfer the darn thing. What if when you die or become incapacitated, your trustee doesn’t understand that? Big problems could ensue. (Yes, I know that the transfer tax doesn’t apply when the transfer is from the estate of a decedent to a lawful heir.)
  • A well-drafted gun trust takes care of the problems I just described because it comes full of instructions and warnings about the relevant law and issues–guidance, if you will–so your trustee knows what and what not to do.
  • A well-drafted gun trust also allows for sharing of NFA items without incurring the wrath of the gun gods. I’ve yet to see a regular revocable living trust that does that.
  • Finally, know this: when you buy an NFA item using a trust, you have to send a copy of the complete trust to the BATFE, which keeps it on file. Do you want to send them your revocable living trust that names all your children, speaks of how you want to disinherit your youngest and how you want the gold buried in your backyard to go to your brother Willard and that you want $1,000,000 of your estate to go to the American Red Cross? I wouldn’t either. A well-drafted gun trust won’t disclose that kind of information.

Anyway, that’s why you don’t want to use your regular revocable living trust as a gun trust.

Filed Under: 2nd Amendment, 41F, Estate Planning, Firearms, Gun Trusts, NFA Trusts, Trusts Tagged With:

Empty Chamber Indicator — Update

March 16, 2016 by Leave a Comment

Ok, so in my first post on the Empty Chamber Indicator, I referred rather cryptically to the television production Behind the Scenes, indicating I might report back later. Well, it’s later.

Yesterday I returned to my office to find a phone message from a man asking me to call Michael Alexander, the producer of Behind the Scenes, which, it turns out, produces short informational documentaries to fill a three-minute space on PBS between the ending of one program and the beginning of another. On commercial TV, that space is filled by commercials.

As I mentioned yesterday, the list of people who’d been featured on Behind the Scenes was pretty impressive, including Colin Powell and G.H.W. Bush and many similar personalities from the world of government, business, medicine, you name it.

The phone message said that Mr. Alexander wanted to talk to me about doing a short documentary on estate planning in general, but more particularly on gun trusts (also known as NFA trusts). I was impressed. First, how did they find me? My blog? My Facebook page? LinkedIn? Other sites I’m listed on? I was also skeptical.

And then Mr. Alexander returned my call. Apparently the company’s legit. And they were interested in talking to me about doing a short documentary on gun trusts. Oh, and as part of the bargain, I needed to fork over some dollars.

Now I don’t say this disparagingly. I don’t think I was being scammed. You see, not only did they distribute their short films through PBS–some 300+ stations, according to Alexander–they also would make sure even shorter versions of the PBS documentaries were shown 50 times on any five TV stations I chose in Utah and Wyoming (I’m not sure whether that was 50 total or 50 x 5 or 250 times). And, they would also “narrowcast” the programs to targeted audiences in the Internet. That’s a lot of publicity.

But it wasn’t free. I won’t disclose the terms here because, well, because. Suffice it to say, it wasn’t cheap, though for the right firm at the right time, doing the deal with Mr. Alexander could be a good decision.

Fame is fleeting. Imagined fame even more fleeting. Oh well.

Filed Under: 2nd Amendment, 41F, Estate Planning, Firearms, Gun Trusts, NFA Trusts Tagged With:

Empty Chamber Indicator

March 16, 2016 by Leave a Comment

For reasons I may disclose later, I was checking out the website of the TV program Behind the Scenes. I looked at some of the program’s past episodes and guests and quickly realized that Behind the Scenes keeps some good company. I was on site, however, to see what kind of journalism the program practiced. I was particularly interested in how it covered some hot button subjects. Guns, for example.

ECIWatch the brief episode at this link and tell me what you think. If you’re interested in purchasing an Empty Chamber Indicator, the product discussed at that link, go here.

 

Filed Under: 2nd Amendment, Firearms, Gun Trusts, NFA Trusts Tagged With: ,

Quote for the Day

March 15, 2016 by Leave a Comment

Failure to address the new issues raised by Rule 41F will expose owners of firearms trusts to the risk of committing a new kind of accidental felony, i.e. related to a failure to document an RP [responsible person]. Firearms trusts must be reviewed–and likely revised–to clarify the roles of the parties involved and whether or not they are RPs. If new NFA applications are made following implementation, it might be advisable to limit the number of “responsible persons” as defined by Rule 41F to avoid substantial paperwork or risking liability for unlawful transfer of an NFA firearm. The legal consequences of failing to comply with the NFA can be severe, including fines of up to $250,000 and up to 10 years in prison, as well as confiscation of the firearm(s) involved.

C. Dennis Brislawn, JD and Matthew T. McClintock, JD, WealthCounsel Federal Rules Brief: The Impact of BATF Rule 41F on Firearms Trusts

Filed Under: 41F, Firearms, Gun Trusts, NFA Trusts, Quote for the Day

Interesting Provision in Wyoming’s Concealed Carry Statute

March 12, 2016 by Leave a Comment

Wyoming Statutes Section 6-8-104 starts off on a serious note intended to get your attention–fast:

A person who wears or carries a concealed deadly weapon is guilty of a misdemeanor punishable by a fine of not more than seven hundred fifty dollars ($ 750.00), imprisonment in the county jail for not more than six (6) months, or both for a first offense, or a felony punishable by a fine of not more than two thousand dollars ($ 2,000.00), imprisonment for not more than two (2) years, or both, for a second or subsequent offense, unless: (emphasis added)

Fine. Imprisonment. Fine again. More imprisonment. All for carrying “a concealed deadly weapon.”

But ahhhh. There’s the word “unless,” and suddenly the clouds disperse and all is right with the world, so long as youIMG_2318

  • Are a peace officer, or
  • Possess a valid Wyoming concealed carry permit, or
  • Have a valid permit from a state that recognizes Wyoming’s permit, or
  • Don’t have a permit, but you “otherwise meet [certain] requirements” under 6-8-104.

That last one may come as a surprise to some. “You mean I don’t need a concealed carry permit to carry a concealed weapon in Wyoming?” they say.

Nope. That’s the magic of the bolded words “otherwise meet [certain] requirements.” Because of those words, and if you

  • Are a citizen of the U.S. and have been a resident of Wyoming for at least six months, and
  • Are at least 21, and
  • Can safely handle a firearm in spite of a “physical infirmity,” and
  • Aren’t prevented by Federal or Wyoming law from possessing a firearm, and
  • Haven’t been convicted of violating controlled substance laws or committed for abusing same, and
  • Don’t chronically or habitually abuse alcohol, and
  • Haven’t been adjudicated incompetent, and finally
  • Haven’t been committed to a mental institution,

you, my friend, can carry a concealed deadly weapon in Wyoming without a permit and consequently without fear of fine or imprisonment. That, and you save the $50.00 application fee.

But . . . But maybe you should consider going through the permit application process and paying the $50.00 fee anyway–plus the cost of a set of fingerprints. If you get stopped by the police for carrying, what would you rather do: Show them your permit and ID and be on your merry way or spend some uncomfortable time with them trying to prove that you meet the requirements I’ve outlined above? Fifty dollars seems a small price to pay to avoid that situation. Besides, try carrying out of state without a permit. Not a good idea. [Added this paragraph later same day.]

A note or two for those of you who do have a concealed carry permit: 1. If a police officer asks to see your permit, you “shall display both the permit and proper identification.” You should already know that, but an occasional reminder can’t hurt. 2. If you move or if you lose your permit or it’s destroyed, you must notify the division of criminal investigation of the Wyoming Attorney General’s office within 30 days or risk having your permit revoked.

There’s more in Wyoming’s concealed carry statute, but this should do for now.

Filed Under: 2nd Amendment, Bill of Rights, Firearms, Gun Trusts, Wyoming Tagged With:

Quote for the Day

March 4, 2016 by Leave a Comment

“Think about the [gun] trust as a means to keep the client safe and legal, and to provide all of the guidance to their beneficiaries so they stay safe and legal.”

Matthew Bergstrom, attorney

Filed Under: 2nd Amendment, Estate Planning, Firearms, Gun Trusts, NFA Trusts, Quote for the Day Tagged With: ,

NFA Firearms in an Estate: What’s an Executor (or Trustee?) to Do?

March 1, 2016 by Leave a Comment

Question Mark_YellowYou’re the executor or personal representative of an estate (they’re the same thing, by the way) or a trustee of a trust. The owner of some NFA firearms has died, and you’re left to deal with the aftermath. (Of course, the real “owner” of any NFA arms in a trust is the trustee, but generally, the initial trustee is the grantor of the trust, who we on the outside looking in, view as the owner.) What can you do with the NFA firearms? If you turn them over to the decedent’s heir under the will or the beneficiaries of his trust, do you have to pay the transfer tax?

Fortunately, the BATFE has been fairly helpful on this point, though it could have been more clear. On September 5, 199, the Bureau issued a letter in which it said the following:

If there are unregistered NFA firearms in the estate, these firearms are contraband and cannot be registered by the estate. The executor of the estate should contact the local ATF office to arrange for the abandonment of the unregistered firearms.

So now you know what to do with unregistered NFA items–if you’re an “executor of the estate,” that is. Did the Bureau also mean “trustee of a trust”? Maybe. Later in the same letter, after the word “heir” has been repeated a number of times, we do see this language:

NFA firearms may be transferred directly interstate to a beneficiary of the estate.

Beneficiary. Is that the same as an heir? Though they are often used interchangeably, the two terms are not precise synonyms. Often the word heir is use to define someone who receives property under a will or via a state’s intestacy laws. Beneficiary, on the other hand, is just as often used to describe someone who receives property under trust. Again, they are also used interchangeably. How is the BATFE using the terms in this letter? Inquiring minds would like to know. Maybe this line from the letter helps,

A lawful heir is anyone named in the decedent’s will or, in the absence of a will, anyone entitled to inherit under the laws of the State in which the decedent last resided. (emphasis supplied)

Hmmm. This sounds like intestacy, but is that all? Does “under the laws of the State” mean the same thing as “operation of law” (see below)?

Well, recently, the Bureau issued the final Rule 41F, which affects so-call NFA or gun trusts, among other things:

It [the new rule] also adds a new section to ATF’s regulations to address the possession and transfer of firearms registered to a decedent. The new section clarifies that the executor, administrator, personal representative, or other person authorized under State law to dispose of property in an estate may possess a firearm registered to a decedent during the term of probate without such possession being treated as a “transfer” under the NF A. It also specifies that the transfer of the firearm to any beneficiary of the estate may be made on a tax-exempt basis. (emphasis supplied)

Such transfers are not taxable transfers because they are not “voluntary”; that is, the executor, personal representative, etc. must follow the terms of the will (or trust?) or law. He or she has no choice. That’s all fine and dandy, but are transfers from trust to beneficiaries tax exempt? Come on. Tell us BATFE. You can do it.

In the commentary on the new rule, the Bureau gets a clear as it’s probably going to get in answering that question, when it says:

Transfers of NFA firearms from an estate to a lawful heir are necessary because the deceased registrant can no longer possess the firearm. For this reason, ATF has long considered any transfer necessitated because of death to be involuntary and tax-free when the transfer is made to a lawful heir as designated by the decedent or State law. However, when an NFA firearm is transferred from an estate to a person other than a lawful heir, it is considered a voluntary transfer because the decision has been made to transfer the firearm to a person who would not take possession as a matter of law. Such transfers cannot be considered involuntary and should not be exempt from the transfer tax. Other tax-exempt transfers—including those made by operation of law—may be effected by submitting Form 5. Instructions are provided on the form. (emphasis supplied)

Operation of law would seem to include transfers mandated by language in trusts, trusts which are created under state law, laws that include fiduciary standards that compel trustees to carry out the wishes of the grantor of the trust, whose wishes are stated in the language of the trust. I’m hanging my hat on that.

There are a couple of other things I’d do to make sure that hat fits in every circumstance, but I won’t go into that here.

 

Filed Under: 41F, Administration, Estate Planning, Firearms, Gun Trusts, NFA Trusts, Probate, Trusts, Wills Tagged With: ,

Quote for the Day

February 23, 2016 by Leave a Comment

Although the phrase implies that the carrying of the weapon is for the purpose of “offensive or defensive action,” it in no way connotes participation in a structured military organization.

From our review of founding-era sources, we conclude that this natural meaning was also the meaning that “bear arms” had in the 18th century. In numerous instances, “bear arms” was unambiguously used to refer to the carrying of weapons outside of an organized militia. The most prominent examples are those most relevant to the Second Amendment: Nine state constitutional provisions written in the 18th century or the first two decades of the 19th, which enshrined a right of citizens to “bear arms in defense of themselves and the state” or “bear arms in defense of himself and the state.” It is clear from those formulations that “bear arms” did not refer only to carrying a weapon in an organized military unit. Justice James Wilson interpreted the Pennsylvania Constitution’s arms-bearing right, for example, as a recognition of the natural right of defense “of one’s person or house”—what he called the law of “self preservation.”

Justice Antonin Scalia, District of Columbia v. Heller. 2008.

Filed Under: 2nd Amendment, Estate Planning, Firearms, Gun Trusts, NFA Trusts, Quote for the Day Tagged With: , , ,

Why a Use a Gun Trust? or Why Shouldn’t I Use My Existing Living Trust to Purchase NFA Firearms?

February 22, 2016 by Leave a Comment

Question Mark_Yellow
I had a person ask me about the difference between a gun trust and his existing living trust. I sent him the following (I’ve changed his name to protect his privacy):

Fred,

Again, thanks for contacting me about gun trusts and more specifically, how a gun trust differs from your existing living trust. I’ll try to be brief:

A gun trust or NFA trust is a purpose-built trust, meaning it is drafted specifically to handle and deal with firearms generally and NFA items specifically.

As I’m sure you’re aware, firearms, unlike almost all other property we may own, is very heavily regulated, especially when it comes to “possession” and “transfer” of those firearms—of course, NFA items are even more heavily regulated. In particular, the laws and regulations governing guns define the terms “possession” and “transfer” very broadly to the end of keeping firearms out of the hands of so-called “prohibited persons.” For example, if you own a suppressor or silencer, and you keep it in your home, and your wife or girlfriend has access to it—meaning, if they wanted to, they could pick it up willy nilly—a zealous prosecutor might consider that “constructive possession” and a violation of the law, an accidental felony, if you will.

Because of all this, the typical living trust is not suited to owning firearms and the issues that come with them. For example,

  • A well-drafted gun trust has specific provisions in it to enable others to “possess” your NFA items and other firearms without running afoul of the law. The typical living trust doesn’t.
  • A well-drafted gun trust has specific provisions to protect against the unlawful “transfer” of NFA and other firearms without violating the law. The typical living trust doesn’t.
  • A well-drafted gun trust has specific instructions to your successor trustees, so they don’t violate the law as they deal with your firearms in the event you die or become incapacitated. The typical living trust doesn’t.
  • A well-drafted gun trust comes with the forms necessary to appoint and terminate co-trustees and lifetime beneficiaries in order to effectuate the lawful possession by and transfer of your guns to others. The typical living trust doesn’t.

On a related note, each time you do buy a suppressor or other NFA item using your trust, you are going to have to submit a copy of your trust, including schedules, etc. to the ATF. Do you really want to give your entire living trust to the ATF?

For these and other reasons, the attorneys I know who practice in this area use gun trusts to handle their clients’s firearms rather than revocable living trusts.

I hope this helps. I hope we have the opportunity to work together on your gun trust.

Respectfully,

Greg Taggart

 

 

 

Filed Under: 2nd Amendment, Estate Planning, Firearms, Gun Trusts, NFA Trusts, Trusts Tagged With: ,
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