Per 20 PA.C.S. 7780, “Recordkeeping and Identification of Trust Property,” a trustee must: 1. keep adequate records of the administration of the trust; 2. keep trust property separate from the trustee’s own property; and 3. ensure that trust property is designated so that the interest of the trust, to the extent feasible, appears in records maintained by a party other than a trustee or beneficiary.
Two issues arise for trustees of a Gun (NFA) Trust. Specifically, 1. when must a trustee record a new asset on the Assignment of Property or Schedule A; and 2. whether a trustee can keep trust firearms in the same gun safe as the trustee’s firearms? These issues are discussed separately below:
1. When must a trustee record a new asset on the Assignment of Property or Schedule A? A trustee must record any and all firearms that are transferred to the trust on the day that they are transferred. Since the firearm is not “transferred” until the BATFE approves the transfer, upon receipt of the approved Form 1 or Form 4, the trustee should immediately add the newly transferred firearm to the Assignment of Property or Schedule A and include the serial number of the weapon. The trustee should copy the approved Form and keep a copy of the Form with the Gun (NFA) Trust and always keeps a separate copy with the firearm at all times. However, this is assuming that the settlor/grantor has given the firearm to the trust. If the settlor/grantor gave money to the trust and the trust used that money to purchase the firearm, then the firearm purchased with the money would not be place on the Assignment of Property/Schedule A. While the trust code does not mandate that the trustee keep a list of these assets, I would highly recommend that a list be kept of all firearms purchased with trust funds. If we have prepared your trust and you bring the original approved form our Bechtelsville office, we will be happy to scan the Form and keep an electronic copy with the trust’s file.
2. Whether a trustee can keep trust firearms in the same gun safe as the trustee’s firearms? This is a difficult question because the Pennsylvania courts have not addressed this issue or any similar issues. Originally, this obligation was to prevent the commingling of funds (cash, stock, mutual funds…etc) because it is virtually impossible to distinguish the trust’s assets from the trustee’s. With firearms, there are several differences: 1. Gun safes are not cheap, some costing upwards of $7000 because of fire protection and weight; 2. Firearms are serialized and the serial numbers are recorded on the approved Forms and on the Assignment of Property or Schedule A; and 3. that public policy would seem to dictate that because of the dangerous nature of firearms, especially NFA firearms, the trustee should be allowed to place the firearms in his safe rather than to have the gun out in the open, where they could possibly be stolen. Hence, a trustee should feel safe in placing trust serialized firearms into his/her gun safe. HOWEVER, if the firearm purchased by or given to the trust does NOT have a serial number, it should be kept in a separate gun safe.