| We get this question all the time, and rightfully so. Who in their right mind spends $1000 on a SBR, another $1000 on a Silencer, and $400 in ATF taxes, only to turn around and give it all away to some invisible entity called a trust? Sounds kind of crazy, right? |
| If you are like me, the only invisible things you believe in are God, the wind, and gravity. But now… we have to add Gun Trusts to the list. I know, something just doesn’t seem quite right with this idea, but as crazy as it sounds, trusts are real… and they can be really confusing. |
| Many years ago during law school, the professor of my Estates and Trusts class compared trusts to corporations. His comparison definitely made things make more sense to me. Hopefully it will do the same for you. |
| All corporations have several things is common: |
| Board of Directors. The Board creates the corporation by giving it start-up money or by contributing valuable ideas, but they don’t have much to do with the day-to-day business. |
| Chief Executive officer (CEO). The CEO exists for the sole purpose maximizing the corporation’s value (aka Stock). The CEO makes the day-to-day decisions, which include buying and selling corporate assets, as well as directing how company assets are to be used. |
| Vice-Presidents. There always seems to be a bunch of vice-presidents in every corporation, especially at banks (ever notice that every bank employee is either a Teller or a VP?). Vice-Presidents have a lot of power, so they get a set of keys to the bank. But, they aren’t so powerful that they can make major decisions on their own (like swapping the ATM out with a pinball machine). |
| Investors. For the most part, investors don’t have any control over the day-to-day operations of the corporation. And, they don’t get use of the company jet, a groovy car, or basket-ball tickets. However, at some point down the road, the investors will finally get their share of benefits. |
| Gun Trusts are very similar |
| Creator (aka Settlor, Trust Maker, etc.). The Creator of the trust is like the Board of Directors of a corporation. When the Creator gives some property to a Trustee, the trust is created. The Creator has little to do with the day-to-day operation of the trust, but gives advice and direction to the other members of the trust. |
| Trustees are responsible for managing the trust property, much like the CEO of a corporation. The Trustee makes all of the day-to-day decisions for the trust, including the purchase or sale of trust property. |
| Supporting Trustees (aka Co-Trustees) are much like the Vice-Presidents in a corporation. Supporting Trustees have a lot of power as they can legally possess and use NFA items owned by the trust. However, Supporting Trustees don’t have the power to swap out a suppressor for a pinball machine. |
| Beneficiaries. The Beneficiaries of a trust have no say in how the trust is operated, what property gets added to (or removed from) the trust, or how the trust property is used, much like the investors of a corporation. However, at some point down the road, Beneficiaries will be rewarded. When the Settlor dies, all of the trust property goes to the Beneficiaries, much like the proceeds from selling corporate stock go to the investors. |
| Warning! Not all gun trusts are the same the previous information only applies to trusts created by the Trust Shop. Most so-called ‘gun trusts’ created by other companies do not provide sufficient safety and guidance to protect you or your firearms. |
