Testamentary Dispositions and Political Contributions
It is commonly understood that Canadian political parties are subject to rigorous rules respecting contributions. Failure to appreciate these rules presents a potential pitfall for the estates practitioner.
Under s.405(1) of the Canada Elections Act, "No individual shall make contributions that exceed: (a) $1,000 in total in any calendar year to a particular registered party [and] (b) registered associations, nomination contestants and candidates of a particular registered party; (c) $1,000 in total to a candidate for a particular election who is not the candidate of a registered party; and (d) $1,000 in total to the leadership contestants in a particular leadership contest."
Subsection 405(2) states that subsection (1) "does not apply to contributions that are made by way of an unconditional, non-discretionary testamentary disposition (emphasis added)."
Accordingly, if a client wishes to leave a gift (i.e. a contribution) to a political party in his or her Will, the parameters of the Act need to be considered by the will drafter to see that the contribution is accepted. A specific legacy would seem the best bet. Moreover, the Act appears to provide no latitude to allow acceptance of testamentary contributions made in settlement of litigation or potential litigation. If a contribution to a political party is a term of settlement of an estate dispute where all concerned agree that such accorded with the intentions of the deceased (yet were never formalized), such contribution may not be accepted.
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