Federal Election Commission Main Page
February 26, 2004
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2004-02
Judith L. Corley, Esq.
Perkins Coie, LLP
607 Fourteenth Street, NW
Washington, DC 20005-2011
Dear Ms. Corley:
This responds to your letters dated November 10, 2003,
and January 13, 2004, requesting an advisory opinion on
behalf of the National Committee for an Effective Congress
("NCEC"), concerning the application of the Federal Election
Campaign Act of 1971, as amended ("the Act"), and Commission
regulations to the receipt of contributions from testamentary
trusts.
Background
You state that a number of NCEC contributors wish to
provide funds to NCEC through bequests or other testamentary
means. NCEC wants to accept contributions from testamentary
trusts, and would like to advise these contributors, or other
potential contributors, of an appropriate method to establish
testamentary giving to NCEC.1 NCEC is registered as a non-
connected committee.
You state that the trusts from which NCEC would accept
contributions would be created and funded only through the
estates of individuals who were legally qualified at the time
of their deaths to make contributions under the Act. The
terms of the trusts would limit the trusts to making the
maximum annual contribution permitted under the Act. The
aggregated contributions from a trust and all other trusts
created by the testator would not exceed the aggregate bi-
annual limit on contributions from individuals. The testator
or executor of the estate will select the trustee, and the
trustee would exercise no discretion regarding the amount of
the contribution. A contributing testamentary trust will set
as a condition of its contribution that NCEC may not pledge,
assign, or otherwise obligate anticipated contributions in
order to realize in whole or in part the present value of
future contributions.
NCEC will expressly agree to abide by these conditions
on such a trust's contribution. In addition, NCEC will not
knowingly accept contributions from any testamentary trust
where the trustee exercises any discretion over whether a
contribution is made or over the amount of a contribution.
Further, NCEC will have no involvement in the administration
of the testamentary trust.
NCEC has not planned any campaign for the purpose of
soliciting contributions through testamentary trusts. NCEC
has not planned a program of providing legal assistance to
contributors wishing to set up such testamentary trusts.
NCEC would be willing to provide assistance when asked,
including providing information and sample forms about how to
set up such a testamentary trust with NCEC as a one of the
beneficiaries,2 and referring a contributor to a lawyer or
trustee familiar with legal requirements governing
contributions from testamentary trusts.
Question Presented
Under the facts and circumstances described above, may
NCEC accept contributions from testamentary trusts
established by individuals for the purpose of making
contributions to NCEC?
Legal Analysis and Conclusions
Yes, NCEC may accept contributions from testamentary
trusts under the facts and circumstances described above,
provided that NCEC satisfies the condition set forth below.
The Act sets a limit of $5,000 per calendar year on
contributions by any "person" to a political committee other
than an authorized committee of a candidate or a political
committee established and maintained by a national or State
political party. 2 U.S.C. 441a(a)(1)(C), 11 CFR 110.1(d).
Under the Act, no political committee shall knowingly accept
a contribution in violation of the Act's contribution limits.
2 U.S.C. 441a(f). The Act defines a "person" to include "an
individual," but makes no specific reference to an
individual's testamentary estate. See 2 U.S.C. 431(11) and
11 CFR 100.10.
Because the Act includes no express or implied
prohibitions on contributions from a decedent's estate, the
Commission has concluded that the testamentary estate of a
decedent is the successor legal entity to the testator and
qualifies as a "person" under the Act that is subject to the
same limitations and prohibitions applicable to the decedent
in the decedent's lifetime. Advisory Opinion 1999-14 and
advisory opinions cited therein. A political committee may
accept contributions from an individual's estate made through
a testamentary trust, which in aggregate do not exceed $5,000
per calendar year. Advisory Opinion 1988-8; see also
Advisory Opinion 1983-13.
In Advisory Opinion 1999-14, the Commission overturned
its previous determination that a political committee may
receive a lump sum testamentary gift in excess of $5,000 per
calendar year.3 In that opinion, the Commission concluded
that such a testamentary gift would amount to a contribution
for the entire bequest at the time the funds were distributed
from the estate and into the political committee's escrow
account, and therefore would be an excessive contribution.
Under the Commission's regulations a contribution is made
"when the contributor relinquishes control over the
contribution. A contributor shall be considered to
relinquish control over the contribution when it is delivered
by the contributor to the . . . political committee." 11 CFR
110.1(b)(6). The Commission's determination that a
testamentary gift in the form of a lump sum bequest is
unlawful under the Act hinged on the fact that the political
committee would control the entire amount of the testamentary
gift, even when placed in escrow.
Advisory Opinion 1999-14 superseded Advisory Opinions
1988-8 and 1983-13 to the extent that those advisory opinions
permitted the acceptance of excessive contributions into an
escrow account, but left intact portions of those advisory
opinions permitting a testamentary trust to make, and a
political committee to accept, a contribution not exceeding
the contribution limits in 2 U.S.C. 441a(a)(1).
NCEC may accept contributions under the facts and
circumstances described above because the testamentary trust,
unlike the escrow account in Advisory Opinion 1999-14, is
beyond NCEC's control. However, NCEC may accept
contributions only from trusts for which neither NCEC nor an
officer, director, employee, member, agent, or affiliated
organization of NCEC serves as trustee. Under the facts and
circumstances described above, this condition will ensure
that NCEC does not exercise any control over the
undistributed trust corpus or interest amounts.
NCEC must report contributions accepted from
testamentary trusts at the time of receipt, in accordance
with 11 CFR 104.3, disclosing the name of the both the trust
and the name of the decedent. Advisory Opinion 1988-8.
This response constitutes an advisory opinion concerning
the application of the Act and Commission regulations to the
specific transaction or activity set forth in your request.
See 2 U.S.C. 437f. The Commission emphasizes that, if there
is a change in any of the facts or assumptions presented, and
such facts or assumptions are material to a conclusion
presented in this advisory opinion, then the requestor may
not rely on that conclusion as support for its proposed
activity.
Sincerely,
(signed)
Bradley A. Smith
Chairman
Enclosures (AOs 1999-14, 1988-8, 1986-24, 1983-13)
_______________________________
1 You note that NCEC has accepted bequests from contributors,
which it processed according to Commission instructions by
placing bequests in escrow and drawing no more that $5,000
per year, until Advisory Opinion 1999-14 made such practice
unlawful under the Act.
2 In a phone conversation on January 12, 2004, Counsel for
NCEC specifically described what types of activities as part
of providing "legal advice" NCEC might undertake.
3 The Commission had previously permitted a political
committee to receive the total amount of a bequest into
escrow, provided that the political committee did not
withdraw more than $5,000 (including principal and interest)
in any calendar year, and did not pledge, assign, or
otherwise obligate the escrow account balance in any manner
to augment its funds. Advisory Opinions 1988-8, 1986-24, and
1983-13.