How to Purchase Firearms in Your Trust – Declaration of Contribution
We strongly recommend purchasing trust firearms using trust funds. Using a trust financial account and saving the receipts properly documents the purchase by the trust. It is possible to properly document the firearm purchase without a separate trust financial account by using the Declaration of Contribution form provided with your trust, but many will find it easier and more convenient to just open a bank account in the name of the trust.
Most individuals, businesses, and trusts do not make the firearm purchase correctly and therefore subject themselves to unnecessary risk of violating local and federal law. Although the chance of being arrested is slight, the proper purchase of items is so simple that it is an unnecessary risk. You never know when a former spouse, business partner, angry neighbor, or law enforcement officer will choose to report your improper purchase subjecting you, your family, and friends to the penalties associated with an illegal weapon, improper purchase, improper possession, and improper transfer of a restricted item. In addition, should someone ever want to remove many of the firearms from the public, what better way than to declare many of them illegal and confiscate and destroy them.
When you purchase a firearm using personal funds or a personal credit card, you create a series of transactions supporting an argument that you, and not your trust, made the purchase. For that reason, we provide you with the Declaration of Contribution located in your memorandum. However, we find that many clients either do not use the Declaration of Contribution form when making a firearm purchase using personal funds or credit card, or use the form improperly.
First, you do not use this form to document a transfer of cash to your trust bank account. It is not harmful, but it is not necessary. Second, if you made the purchase using a trust financial account, you do not use this form. It is when you DON’T use a trust financial account to make the purchase that you use this form. You are documenting the missing step – a transfer of funds to the trust and then a purchase by the trust. When you make a trust firearm purchase using personal funds or a personal credit card, it looks like you, individually, made the purchase. Combined with an improperly filed out Form 4473, it really looks like you, and not your trust, owns the firearm.
Considering the Colorado laws enacted in 2013 and the Colorado Red Flag Bill which appears to be on its way to becoming law, properly documenting Colorado firearm ownership is more important than ever. The best solution is to use a trust financial account and keep proper receipts. The next best solution is to use the Declaration of Contribution. In both situations, be sure to fill out Form 4473 per instruction 1 and keep copies.
