The answer, generally speaking, is no, unless you have competent legal advice on how to form a trust that would allow the trustee to “use” the assets. What many who use Quicken or other products, instead of seeking competent legal advice, fail to recognize or understand is the purpose of a trust and the fiduciary duties that go along with it. So, first let me explain the purpose of a trust and then speak about the fiduciary duties.
The purpose of a trust is for the grantor to place certain assets in trust for the benefit of the beneficiary. By doing this, the grantor is transferring possession and ownership of the assets to the trust. The trustee is to hold/possess the assets for the beneficiary(ies) pursuant to the regulations that the trust imposes on him/her. However, there are certain regulations that Pennsylvania’s Trust Code imposes on a trustee, as is discussed below. So, to understand the purpose of a trust, it is best to use an example. So, let’s assume that John wants his pristine 1957 Chevy with 20,000 original miles to go to his son, when his son is of an age and maturity to respect the nature of the vehicle. So, John forms a trust, places the 1957 Chevy in the trust, and elects Steve, his friend, to be the trustee. Steve, as trustee, now has possession of the 1957 Chevy since he is the trustee; however, if Steve starts driving the car around, the value of the car will depreciate as compared to the value of the car without the additional miles.
While I will not go over all the trustee duties, I will go over the pertinent duties in PA (and in most jurisdictions) relating to the “use” of trust assets. In Pennsylvania, under 20 PA.C.S. 7771, a trustee has a duty to administer the trust. Specifically, “Upon acceptance of a trusteeship, the trustee shall administer the trust in good faith, in accordance with its provisions and purposes and the interests of the beneficiaries and in accordance with applicable law.” Furthermore, under 20 PA.C.S. 7772, a trustee has a duty of loyalty. Specifically, “(a)DUTY OF TRUSTEE.—A trustee shall administer the trust solely in the interests of the beneficiaries.” Lastly, under 20 PA.C.S. 7779, a trustee has a duty to control and protect the trust property; “A trustee shall take reasonable steps to take control of and protect the trust property.” Thus, by “using” a trust asset, a trustee would breach these duties owed to the trust. Back to our example above, Steve, because he drove the car around, he would have breached these duties, unless he drove the car to protect it from destruction or for some other similar reason. Hence, if Steve moved the car out of the garage that was ready to collapse, he would not breach his duties, but if he drives the car to the store to pick up his groceries, then he has breached these duties.
So, in the firearm realm, it is very hard to find a situation where the trustee would not breach his duty by using the firearm. Since the trustee would not need to “use” the firearm to move it if there was impending danger, the above car example would not apply. Even if the trustee’s life was in danger, while he could “use” the weapon under the doctrine of necessity, he would still breach his duties and be liable to the beneficiary for the depreciation.
Some have suggested that the individuals that the grantor wants to be able to “use” the weapons should be made life beneficiaries because the trust statute does not limit their “use” of the trust asset, because the trust is specifically designed to allow them to use the asset. The problem that many overlook is property law in this context. Where an individual has something less than fee simple (fee simple is a legal term used to represent the individuals interest in the property. If you have fee simple, it is solely yours and not subject to anyone else’s interest. Whereas, if you have a life estate, you only have an interest in the property for your life and then the property either reverts back to the grantor or the future interest holder takes possession), he/she cannot commit waste with the property. Surprising to most people is the fact that waste includes any acts by the life estate holder to make the asset better, which is referred to as ameliorative waste. Thus, in the firearms context, if you are a life beneficiary, you can use the firearms but may be liable for waste, including if you refinish the firearm or add an accessory to it. Many people finding this greatly surprising, but one must remember that what is one person’s greatest treasure can be another person’s trash.
In conclusion, neither a life beneficiary nor a trustee is perfect if the grantor desires to allow the included individuals to “use” the trusts assets. As such, it is imperative that you seek out competent legal advice on how to prevent trustees or life beneficiaries from being held liable for breach of duties or waste.
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