Gun Trust Update – Colorado Red Flag Bill
Several laws are currently being considered impacting gun owners. We suggest to our clients to consider making all future firearm purchases (Title I or Title II) in the name of their trust through a trust banking account and a properly executed for 4473 identifying the trust/trustee.
On the Federal level, the House has passed H.R. 8, and that proposed law is now in the Federal Senate. H.R. 8 is styled in terms of a background check upon sale law. H.R. 8 is very similar to the Colorado transfer of possession law enacted on July 1, 2013. Anytime there is a transfer of possession of a firearm, gun owners must determine whether a background check is required. As this law moves through the Senate, we will provide updates.
On the state level, the Colorado Senate is considering the Colorado Red Flag Bill; more formally known as HB18-1436 (Extreme Risk Protection Orders). While couched in terms of a person who poses a significant risk to self or others by having a firearm, it is far broader than that. The Colorado Red Flag Bill allows virtually anybody to petition the courts to take away your firearms under the pretext of an Extreme Risk Protection Order. That initial order is issued without your knowledge or ability to defend. Once the order is issued and served upon you, you must relinquish possession of all firearms in your possession to the law enforcement agency.
The Colorado Red Flag Bill is just one more reason to consider transferring your Title I (non-NFA) firearms to your NFA trust we drafted and making all additional purchases in the name of your trust. Recent versions of our NFA trust deem a trustee to be expelled upon becoming a prohibited person. Arguably, the moment the court issues the Extreme Risk Protection Order, you are no longer trustee and another trustee who you have already appointed or who you can immediately appoint becomes trustee. I emphasize recent – I checked a 2010 version of our NFA trust and the required language was not there. In most of our NFA trusts, this language would be in Article V, Section B (Duty to Inform). The specific language to look for is “deemed to have resigned”. If your Article V (B) is only 3 or 4 lines long, the important language is not there. If you have an older trust that needs amendment, please contact our office.
A small number of our clients have a non-NFA version of our trust that we typically used in 2013. The required/similar language should be in your trust in the last paragraph of Section 14.8 (Prohibited Persons).
An open question in Colorado is whether a transfer of a Title I firearm from you to your revocable trust requires a background check on you. While this sounds silly, the Colorado background check law could be strictly read to require such a check. As to any co-trustees, the Colorado background check law would probably require a background check on those co-trustees. In our trusts since 2013, we have typically included savings language to prohibit a co-trustee who is required to have a background check from being in possession of a trust firearm unless pursuant to one of Colorado’s exceptions. The exception we usually rely on is a temporary transfer for less than 72 hours. In the NFA trust, this language would be in Article V (L).
I encourage you to check your trust for the required language deeming a prohibited person to be expelled from the trust. If the language is not there, please contact the office regarding amendment. This language was inserted for other reasons besides the Colorado Red Flag Bill. This is not just about a mental health issue. It is about any situation where a trustee has become a prohibited person, even temporarily.
For those of you with pre-2013 trusts, I encourage you to fully amend and restate your trust to our current version. We have made many improvements and modifications over the last 6 years.
Last but not least, if you have friends who went the “cheap trust option”, we can amend their trust giving them the same quality document that you currently have.
