With the heated debate on gun control dominating headlines and social media in recent years, a lesser-discussed aspect of gun ownership is not getting sufficient attention. The number of cases highlighting the civil liability pertaining to gun ownership are increasing, and gun owners in states with a strong anti-gun mentality are finding themselves up against juries with similar anti-gun sentiments.
Gun Owners Civil Liability
Liability for the ownership or use of a firearm varies by state and with the circumstances. Gun advocates admit the need for protection from civil liability. A cursory review of recent civil cases shows just some of the ways gun owners can become liable:
- Improper storage of a firearm leading to loss or theft of the firearm
- Allowing minors to have unsupervised access to firearms
- Hunting accidents
- Injuries at shooting ranges or shooting education events
- Mechanical or ammunition failure resulting in third party injury
Even the National Rifle Association acknowledges the problem, and includes $5,000 of coverage for accidental death and dismemberment with respect to the member’s firearm use. But $5,000 of coverage does little to protect from the very real possibility of multi-million-dollar lawsuits in the event of severe injury or death.
Liability in Self Defense Cases
Gun owners face the possibility of a civil suit even when their actions are taken in self-defense and are justified. Looking at Florida, for example, the statutes provide for the lawful use of a firearm in a self-defense scenario. As such, prosecutorial investigation of a self-defense case often results in no charges brought, and in the event that charges are brought, self-defense is an affirmative defense at trial. Even when no criminal charges are filed, the same self-defense statute does not provide immunity from civil lawsuits. Florida, like many states, uses a “comparative fault” system for assessing civil liability. Based on a preponderance of the evidence, a civil jury assigns a percentage of fault to the plaintiff, the defendant, and any third party contributors. Even a finding of 25% fault in a wrongful death lawsuit can result in a multi-million-dollar settlement or judgement.
A recent controversial case highlighted this disparity. The parents of Trayvon Martin received a $1mil settlement from the Homeowners Association’s insurance carrier in a wrongful death action, while a criminal jury found the shooter, George Zimmerman, not guilty due to Zimmerman’s assertion of self-defense.
Grading Options for Gun Owner Protection from Civil Liability
Unfortunately, in our litigious and anti-gun society, the options available to mitigate the civil liability risk of gun ownership are few, and popular methods tend to be ineffective.
I. Gun Trusts
Gun trusts grew in popularity as a way to purchase Class 3 (restricted) firearms for the use of a group or family without the need to have each person obtain individual licensing. But to be absolutely clear, and contrary to what many people believe, gun trusts do nothing to shield the firearm owners from liability. In fact, if anything, being a party to the trust (a trustee or beneficiary) may expose you to MORE liability insofar as a litigator can bring you into a lawsuit as a co-defendant where another trustee or beneficiary was negligent with the firearm owned by the trust.
We grade gun trusts: F. No protection.
Among asset protection attorneys, insurance is a contentious topic. Affordable insurance on high valued assets is usually advisable, but insuring general liability is a mixed bag. The insurance often acts as an incentive for frivolous lawsuits, and the addition of an insurance company lawyer to litigation introduces an unknown variable in the settlement process. Part of the reason why Trayvon Martin’s parents sued the Homeowners Association and not the shooter is the simple fact that the association had an attractive asset—an insurance policy.
General liability or firearm specific insurance can provide some protection against firearm related suits, but is as much an attractor of suits as it is a protection for the gun owner. And, it’s important to note that many insurance policies do not cover criminal conduct, so if your firearm discharge results in criminal charges (or what the insurance policy labels as “willful bad acts”), you will likely face the civil repercussions without insurance. We have a saying: “Insurance companies are not in the business to pay claims. They will try to weasel out of paying a claim it at all possible.”
We grade insurance: C. Some possible protection.
III. State Law Exemptions
Although often forgotten in asset protection discussions, state law exemptions do play an integral role in assessing civil liability. As asset protection attorneys, we generally shy away from reliance on exemptions as so many have exceptions for unforeseeable liability. But when discussing the very specific liability associated with gun ownership, these exemptions can be effective.
Exemptions vary from state to state. On the high end, some states exempt all marital assets (known as tenancy by the entireties, as discussed below), head of household income, retirement accounts, annuities, or personal residences. We recommend consulting with a local attorney to discuss your state exemptions. Generally speaking, persons with a high net worth, owners of small business, two income households, or those residing in states with low exemption limits, will not be protected by state exemptions.
We grade state law exemptions: B-. Varied protection.
IV. Tenancy by the Entireties
In states like Florida, a form of asset ownership known as tenancy by the entireties (TBE) plays a significant role in determining what assets are available to satisfy a civil judgment. The basic principal of TBE is simple: TBE assets are owned jointly by two spouses, so only creditors with claims against BOTH spouses may seize TBE assets.
Setting aside that TBE protection relies on two living spouses (and over the course of litigation, marital problems or unexpected death can occur), the main problem with relying on TBE assets for protection against firearms related suits is that there are simply too many common fact patterns that would give cause for liability against both spouses. For example, a common self-defense scenario where an intruder is shot in the firearm owner’s home. Even if the shooter was able to prove sole responsibility for the self-defense shooting, the fact that the shooting occurs in a home likely owned as TBE could make both spouses civilly liable for any wrongdoing. The number of similar fact patterns where both spouses could be drawn into the suit is near limitless.
We grade tenancy by the entireties: F. No protection.
V. Foreign Asset Protection Trusts
In the vacuum of other effective tools to protect gun owners from civil liability, the foreign asset protection trust (FAPT) has become the gold standard. Properly implemented asset protection can shield against not only firearm related liability, but any other form of creditor that may arise. When created in advance of any claim, and done so by an experienced asset protection attorney, the trust places the firearm owner’s significant assets in a protected structure that is outside the jurisdiction of the court. Unlike insurance policies, the FAPT is effective regardless of the conduct of the firearms owner and acts only as a deterrent from litigation. Unlike state law exemptions, the FAPT’s protection does not differ based on the amount of protected assets. And unlike TBE protection, the FAPT is effective regardless of the number of defendants or their relationship.
The costs of establishing a FAPT may be an impediment to some, and accordingly these structures are typically only utilized by firearm owners with liquid assets (cash and securities) in excess of $1mil. But for those with the assets to lose, it’s an easy decision.
We grade FAPTs: A+. Complete protection.
While there are varied options available to shield firearm owners from civil liability, each come with some restrictions. However, the message is clear: if you can afford the establishment of a foreign asset protection trust, it is the only reliable method of shielding you and your family from liability.