Why Are Legal Protection Strategies Important For Churches
A primary Heritage21 service for Churches of Christ is to make sure they are legally protected in times of difficulty or crisis. Struggling congregations often experience some of the following challenges:
- Facilities deteriorate until their value is greatly diminished
- Facilities may be taken over by groups who do not share the congregation’s biblical values
- Properties are sold and the proceeds are stolen or distributed by remaining individuals in violation of the tax code and state law
- Leadership is unable to make sound decisions due to conflict or lack of effective counsel
These outcomes are preventable for congregations that are diligent about stewarding the resources God has entrusted to their care.
Below are two examples of churches who sought help to ensure that they were faithfully stewarding their church’s legal responsibilities.
A Healthy Congregation
A small, active congregation outside the Bible Belt is not currently at risk of closing. Their leadership reached out to Heritage21 for help in forming a long-term plan to minimize three risk factors that could jeopardize their future:
- A decline in attendance over the past few years
- The transient nature of its membership due to its location near a military base
- The significant value of their property as an attractive target for takeover.
Over several months Heritage21 shared multiple ways that the church could protect and preserve the property for long-term kingdom work. After considerable discussion among the leadership and the congregation, they chose to first revise and strengthen their corporate documents—Articles of Incorporation and Bylaws—to include provisions which made it more difficult for a takeover of their property.
While updated Articles and Bylaws are not an absolute protection, they are an effective first level defense and deterrent to those who would divert the resources for other purposes. The discussions with Heritage21 also alerted the leadership to signs of increasing risk.
A Struggling Congregation
A small church in the southern U.S. dwindled to less than twenty-five people. Remaining members recognized their need to faithfully steward their property as they contemplated closing. When they reached out to Heritage21, we determined two serious legal problems that needed resolution before closure and the distribution of the property assets for kingdom purposes.
First, Heritage21 discovered that the church had never been incorporated, thus leaving all members exposed to potential legal liability for any injury that might occur on the property or ill-advised action of other members. Being unincorporated would also make it difficult to sell or transfer the property. Second, Heritage21 learned that the property title was very uncertain, also making selling or transferring a challenge.
Over several months, Heritage21 assisted leaders in incorporating the church and clearing title questions. Heritage21 also helped them with the sale of the property, dissolution of the corporation, and their options for good stewardship of the proceeds after closing.
Beyond Incorporation and Property Protection
In addition to these examples, Heritage21 assists congregations with a wide range of legal challenges:
- Selling or transferring church properties
- Consulting on stewardship of proceeds
- Mediating conflict among members
- Advising on and implementing congregational mergers
- Investigating and exposing fraudulent intent
- Assisting with IRS compliance
- Incorporation
- Protecting members from liability
- Helping resolve title clearance issues
- Filing lis pendens to protect properties
- Dissolving corporate entities
Heritage21 has witnessed several instances where once vibrant congregations did not feel they were in jeopardy, but they eventually declined to the point that the Lord’s kingdom lost those property assets and their use for the biblical mission of God.
Why does Heritage21 want to help?
H21 acknowledges that the church is not a secular entity and that church property is not the church. However, we believe that priority stewardship demands that we use state laws to protect congregational assets and to make sure they are used in legal and God-honoring ways. While each situation is unique, when members are willing to think beyond current circumstances, their actions can have lasting kingdom impact.
Heritage21 is our fellowship’s premier and trusted advisor for congregations in need of consulting, renewal coaching, legal strategies, real estate assistance, and trustee services. We are especially driven to assist challenged congregations that are in the midst of transition and don’t know where to turn.
If H21 can be helpful to your congregation, please visit Heritage21.org to download resources or start a conversation using the contact form.
It is our joy to help you protect your properties and ensure they continue to be used to honor God, serve his people, and carry out the Great Commission.
You might also be interested in: