What a Gun Trust IS
A Gun Trust is, at its roots, an estate planning tool. It is specialized in that it allows for some flexibility when acquiring and transferring National Firearms Act regulated items. This generally refers to Title II items such as suppressors, short-barreled rifles and short-barreled shotguns.
Some of the benefits are:
* More than one person can be a Trustee and can thus possess and use the items held by the Trust without having to request individual permission from your local Chief Law Enforcement Officer (CLEO) or the BATFE.
* Since the items are held in the Trust, if the current Trustee in possession of the item dies, there is no transfer procedure. This, of course, assumes that you have set up the Trust to stay running after your death, and that you have assigned rights to other Trustees.
* Your heirs can avoid probate (of the items in the Trust) since the items are held by the Trust.
* Bypassing an executor of your estate (who may not know the rules related to firearms and how to dispose of NFA items), instead allowing a more qualified Trustee to manage the collection.
* And, of course, the most important benefit: generally faster processing by the BATFE.
What a Gun Trust IS NOT
First off, an NFA Gun Trust is not a way to “get one over” on the BATFE. An NFA Gun Trust will not allow you to violate or bypass state (nor federal) laws and restrictions.
The Trustee purchasing the item on behalf of the Trust must still comply with the Brady Act.
If you want to cross state lines (i.e. “interstate transfer”) with an NFA item (“any destructive device, machine gun, short-barreled rifle, or short-barreled shotgun”; there is no mention on the form regarding suppressors), which includes going to a competition, moving, hunting in another state, etc., you must notify the BATFE months in advance of the crossing via a Form 5320.20. [EDITED]
You cannot take an NFA item to a state that does not allow it. (e.g. you cannot take a short-barreled rifle to Washington, New York or California, as they are illegal to possess in those states). [EDITED: As of Apr 2nd, 2014, SB5956 allows for SBRs in Washington State]
If you plan to move (and take NFA items with you), you must file a Form 20 with the BATFE and let them know what the new registered address of the NFA items is going to be. You must do this many months in advance.
If a Trustee lives out of the state they can still be involved in the trust but can only access and use the restricted items in the state where the trust is registered, or in those states included on the filed Form 20.