| fcg | 0 Comments | Estate Planning, Gun Trust, Probate

Fiduciary Liability

Family and litigation never mix well. That is why the selection of a good executor or trustee (collectively “Fiduciary”) is such an important piece of any estate plan. The Fiduciary can ensure that the estate or trust is administered smoothly and in accordance with the deceased wishes, or they can screw up the most beautiful, intricately drafted estate plans out there.

However, Fiduciaries do not have all of the power in estates and trusts. They have duties that they must perform or they may be liable to the beneficiaries of the estate or trust. By accepting the mantle of a executor you are accepting the liability that comes with it. You have a duty imposed by law to settle the estate as expeditiously as possible, without sacrificing the value of the estate.[i] Therefore, by accepting the position of executor you are accepting the responsibility to administer the estate as quickly as possible and you have a duty to reasonably preserve value of the estate.

In the event that the fiduciaries fail to carry out the express wishes of the Will or trust, or have breached their fiduciary duty in some other way, they may themselves be sued personally for damages. [ii] This can be as simple as failing to maintain proper accounting and documentation for the estate or failing to sell property for fair market value. If a fiduciary lets the accounting process get away from them, they may have to pay for the damage out of their own pocket.

Before you accept the mantle of a fiduciary, you need to understand your role. You have a duty to get the job done in an expeditious fashion, not just when it is convenient for you. From a practical standpoint, you also need to know the family dynamic that you are stepping into. Is it a large family with many beneficiaries? Is someone being disinherited? Is a beneficiary drug abusers or spend thrifts? Are you stepping into some sort of family feud? All of these could show you that there is the potential that you may be sued or challenged in your role as a fiduciary, whether or not you do your job perfectly.

Everyone needs a good Fiduciary, and if you can serve well in that role I do not want to scare you off. However, too often we accept the role of executor or trustee without fully understanding the implications of that decision. The executor position is one of service, though too many executors assume that simply because they are in the position of executor they have all of the power. If you abuse the power entrusted to you as executor you are opening yourself up for a suit.

[i] O.C.G.A. § 53-7-1(a).

[ii] O.C.G.A. § 53-7-54.

| fcg | 0 Comments | Business Planning, Estate Planning, Gun Trust, SHOT Show

New Gun Trust Rules

As many of you have probably heard, the Bureau of Alcohol, Tobacco, and Firearms have issued a final rule on 41F, which will effect how gun trust are regulated and managed. Before the rule, Trustees were not required to provide fingerprints for the application for NFA items. Now anyone who is deemed a responsible party, as defined in the regulation.

A responsible party is defined as:

Responsible person. In the case of an unlicensed entity, including any trust, partnership, association, company (including any Limited Liability Company (LLC), or corporation, any individual who possesses, directly or indirectly, the power or authority to direct the management and policies of the trust or entity to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust or legal entity. In the case of a trust, those persons with the power or authority to direct the management and policies of the trust include any person who has the capability to exercise such power and possesses, directly or indirectly, the power or authority under any trust instrument, or under State law, to receive, possess, ship, transport, deliver, transfer, or otherwise dispose of a firearm for, or on behalf of, the trust. Examples of who may be considered a responsible person include settlors/grantors, trustees, partners, members, officers, directors, board members, or owners. An example of who may be excluded from this definition of responsible person is the beneficiary of a trust, if the beneficiary does not have the capability to exercise the powers or authorities enumerated in this section.

Unfortunately, as is the case with most legal definitions, this definition could be broadly construed or narrowly construed. We will simply have to wait for further guidance from ATF, which I am assured that they are working on putting out. As we continue to go through the updated rule and the guidance we will keep you informed of how your gun trust may be affected.

For now many of you may have trusts that may run afoul of this change. Don’t worry, it is not a retroactive ruling and they will not come and confiscate your firearms in the trust. This new rule will become effective 180 days after being published in the federal register, which would make it effective July 13, 2016. So if you have any current applications before the ATF you should be all right as well.

However, this may be a problem for those of you who wish to add to the trust. You trust that worked before, may no longer be able to pass the application process. To add to your trust you will need to amend your trust.