New York Estate Planning & Elder Law Blog
How should you decide who you should name as beneficiaries in your estate planning documents? For many, the answer is not too complicated: leave it all to the children. However, just because that model is the most common form of passing on assets does not mean that there are not others who you might like to leave something. For many, designating beneficiaries in a will and trust documents is an important way to re-iterate their values, morals, and interests one final time. After all, estate planning is about legacy-building.
Charitable contributions are common, as New Yorkers seek to help out their favorite causes one final time. Similarly, many residents decide to leave assets to political causes. The total amount donated to political parties and candidates this way is actually quite substantial. However, because of campaign finance laws, there are some additional complications when making these bequests.
Political Beneficiaries
As discussed in a recent USA Today analysis, nearly $600,000 have been given to individual federal office candidates alone by deceased individuals in the last four years. This total, culled from Federal Election Commission (FEC) data, does not include any money left to political parties or other-politically connected organizations.
Federal law allows these contributions as part of an estate plan in a similar way to donations to charities. However, one key difference are the general restrictions on all political donations, made even by the living. Current law limits individual donors to $5,200 per candidate and $32,500 to a political party on a yearly basis. All estate planning which involves political beneficiaries must take those campaign finance rules into account.
Yet, it may not be as simple as remembering not to leave too much. That is because recent U.S. Supreme Court decisions related to campaign finance laws are leading some to argue that those restrictions are unconstitutional. Most notably, the 2010 Citizen’s United decision struck down laws which placed caps on a corporation’s ability to donate unlimited funds to these causes.
Another suit is pending which would essentially do the same for individual donors. That latest suit was filed by the Libertarian Party,which is arguing that the $217,000 that a man left the party in his will should be given in a lump sum–instead of in annual installment falling below the campaign contributions limit.
It is impossible to say now if the law around contributions to political parties and candidates will change. Right now,it is important to reiterate the importance of having professional help with including political parties or candidates in an estate plan.