The Internal Revenue Service has extended the deadline for filing for estates of those who died in 2010. The previous deadline was November 15, 2011 for estate of $5,000,000.00 +. The new deadline is now January 17, 2012.

The estate and generation-skipping transfer taxes that were repealed for 2010 were reinstated retroactively to January 1, 2010 when President Obama signed the 2010 Tax Relief Act into law last December.

The new law also gave the estates of those who died in 2010 a special tax break: they could elect to opt out of the default estate tax regime and receive a full step-up in basis on estate assets. The IRS has finally published guidelines for the executors of estates of individuals who passed away in 2010, explaining how executors can opt out of estate taxes and the tax rules that apply, however, the form that needs to be filed with the IRS to opt out of the estate tax has not yet been issued. Therefore – the extension.

Have you ever had an estate in which the decedent left a gun collection to certain beneficiaries? Have you considered whether any of these guns are federally restricted? There are restrictions on certain automatic weapons, silencers, short barreled rifles, for example, requiring a federal tax stamp to acquire as well as the approval of the local Chief Law Enforcement Officer (CLEO). There are many regulations and issues surrounding passing guns down to one’s heirs that are not present with a bank account, chair, picture or other types of property. You must consider where the beneficiary lives, the laws of that state, the laws of the state in which the guns are located, the eligibility of the beneficiary to be in possession of guns, etc.

If it is not a good idea for the beneficiary to possess the guns, an alternative is to prepare a Gun Trust which is a special purpose revocable living trust.

A Gun Trust is used for two main reasons:

1. To expedite a transfer of the a National Firearms Act firearm. In using a trust you don’t have to obtain the approval of your local CLEO and the application can be sent directly to BATF. Registration of a NFA firearm to an individual or corporation can take 1 -3 months to complete. The firearm cannot be handled or transported by any other private individually unless the firearm’s registered owner is present. However, NFA items owned by a properly drafted trust may be legally possessed by any Trustee and a beneficiary may use the item in the presence of or under the authority of the Trustee.

2. to provide detailed instructions over disposition of one’s gun collection.

There are gun dealers who provide trust forms, however, they may just be standard revocable living trusts, not specifically written about firearms ownership. They typically do not provide guidance or limitations for the Trustee who may find him or herself committing a felony in the way the items are used, held, transferred or sold. Some people cannot legally possess firearms. Some transfers are illegal. A properly written gun trust or NFA purposes is far more than a form. It helps the decedent’s loved ones deal with items that are problematic at best under both state and federal law.

REAL ESTATE UPDATE

Just a quick FYI to those real estate practitioners out there – On September 14, 2011, Gov. Chris Christie signed a law that expressly exempts from the State Bulk Sales Transfer Act, those home sales by individuals, estates and trusts.

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