Gun Trust Issues Using LegalZoom

Possible Problems Using LegalZoom For A NFA Gun Trust

Below are some issues that can arise from using LegalZoom to create a gun trust for NFA purposes. Although many have successfully used LegalZoom to create a NFA Gun Trust subsequently approved by the BATFE, potential flaws can still exist. Most of these potential problems can arise at the time of distribution, not when the trust is initially submitted to the BATFE.

LegalZoom Trust Issues Consequences
1 The Trustor/Grantor is not properly identified. This can result in an invalid trust. An invalid trust can result in illegal transfers/possession and civil/criminal penalties.
2 Problems when property is transferred to decedent’s will. NFA items must be transferred pursuant to BATFE requirements. Failure to do so can result in forfeiture and other penalties.
3 Allows for revocation of trust with NFA firearms/items. Cannot revoke trust until AFTER transfer of those items. If trust is revoked, it cannot posses/own NFA firearms. These items MUST be transferred prior to revocation or else illegal possession/transfer occurs with their requisite penalties.
4 No requirement that trustee be legally able to possess NFA firearms. A trustee must be legally capable of possessing NFA firearms. If no requirement is set forth in trust, trustee could face serious liability from BATFE.
5 Termination of trust because trustee cannot transfer items in time. BATFE must approve of transfer BEFORE transfer/disbursement can occur. Failure to get BATFE approval of transfer BEFORE it occurs can result in an illegal transfer. Serious penalties can ensue, including fines and jail time.
6 No warnings to future trustees about compliance with state and federal firearms laws. Future trustees who are unaware of NFA laws could illegally transfer such items.
7 Successor trustees must sell off trust property if odd number of beneficiaries. Specific guidelines for disbursement are needed or NFA items will be sold off instead of distributed.
8 No power to use NFA firearms. This can result in illegal possession and/or civil liability to beneficiaries.
9 Absence of language about geographic restrictions. This can result in illegal transfers to beneficiaries who reside in jurisdictions that do not allow NFA firearm ownership/possession.
10 Absence of age restrictions allowing the trustee to determine when beneficiary is of level to possess NFA firearm. Beneficiaries may not be mature enough to possess/own NFA firearms at death of trustor and time of disbursement.