Lesson 8b: Obtaining insurance on leased or owned trust real estate

Jerald Finney
Copyright © January 20, 2022

Go to the following webpage for links to additional lessons:
Lessons on the Bible (Common Law) Trust

Remember the property is not owned by the church. The real, true, and equitable owner of all property in the trust estate is the beneficiary, the Lord Jesus Christ. The trustee is acting as trustee of the trust, not as pastor of the church. He is not acting for the church. Thus, he should be careful not to identify himself as the pastor of the church when obtaining insurance, or otherwise as part of his duties as trustee. He is acting as the trustee of property owned by the Lord. He is acting to provide a meetinghouse for the church, according to the Lord’s will and for the Lord.

When the trustee approaches the insurance agent, he should state,

“I am the trustee of [Name of trust]. This is an irrevocable trust. I want to obtain insurance on real estate held in trust. Here is a copy of the trust documents, and here is a copy of the title (naming the trust as owner) or the lease (naming the trust as lessee).”

Remember that church members give to the Lord (to the irrevocable trust estate which he owns), not to the church, as with a church which is a legal entity such as an incorporated 501(c)(3) or 508(c)(1)(A) church. Remember also, that in an irrevocable trust, the church has no claim to any property held in the trust estate. When anyone gives to the trust estate, the new owner is the Lord Jesus Christ and the giver loses all claim to what he gave.

After hearing or seeing the name of the trust, the agent may ask questions such as, “Are you the pastor of the church?” The trustee should state that he is not acting as pastor of the church, but as trustee of the trust. The documents make that and other relevant matters clear.

The company will probably present a “Church” or “BUSINESSOWNERS Church” policy. Even though the policy may be opened in the name of the trust, the policy, and trust forms attached thereto, make clear that the policy covers the church. Opening such a policy has just compromised the position of the church. The trustee effectively declares that the church is a legal entity capable of being sued; and by extension acting as a legal entity in other matters. Only a legal entity can be sued, sue, contract, or act legally in other ways. When the trustee purchases a church policy, he has destroyed what the church set out to do by establishing the irrevocable Bible (common law) trust. He treated the church as a business; a legal entity committing spiritual fornication with a lover other than the Lord Jesus Christ. He has opened the door for a disgruntled church member who wishes to file a lawsuit to settle a dispute with other church members, a non-member, or the civil government  to take the church into court to resolve a matter.

An individual policy held by “[Name of trustee], trustee of [Name of church] Trust” is more appropriate, although the policy can be held in the name of the trust. Remember, the trustee is legal owner of the property. He holds and manages the property solely for the benefit of the owner of the property, the Lord Jesus Christ (the beneficiary). He receives no salary for acting as trustee, and no property is to ever accrue to his benefit.

The policies and forms set the church up as a business, a legal entity, even if the policy is held in the name of the church. Church policies, at the church’s election, include or exclude terrorism insurance coverage at no additional cost. They will also include property and liability coverage. Covered will be things such as “Accounts Receivable,” “Business Income,” “Business Income from Dependent Properties,” “Business Personal Property Temporarily in Portable Storage Units,” “Electronic Data,” “Forgery or Alteration,” “Interruption of Computer Operations,” “Money Orders and Counterfeit Currency,” “Newly Acquired or Constructed Property,” “Outdoor Property,” “Personal Property Off Premises (Transit),” “Total Faith Businessowners Coverage Enhancement,” and “On-Premises and Off-Premises Valuable Papers and Records. Do you see how such a policy compromises, on its face, the position of the church as a church under Christ alone and declares the church to be a business?

The trustee must be vigilant in performing all his duties, to include obtaining insurance on the Lord’s real estate.

Always remember that I, as your servant in the Lord, am here to help in any matter. Please do not hesitate to contact me for any reason. God bless.

Lesson 7: Opening a Bible Trust Checking Account

Jerald Finney
Copyright © January 5, 2022

Go to the following webpage for links to additional lessons:
Lessons on the Bible (Common Law) Trust

 Remember that this is a Bible trust, not a church, checking account. The trustee, not the pastor, is opening the account. The trustee may be the pastor, but he is not acting as the pastor when he opens the trust account. Never refer to the trustee as pastor when he is functioning in his capacity as trustee and vice versa. The trustee should not begin by saying to the financial institution, “I am the pastor of [such and such] church and wish to open a “checking account,” or “church checking account,” or “trust checking account.” He should say, “I am the trustee of [Name of Trust] and I want to open a trust checking account.” I know it is easy to say “pastor” when referring to the “trustee” and vice versa; but It is very important to act and speak properly when the trustee is carrying out his duties as trustee; likewise, for the pastor.

The trustee goes to the financial institution with the executed trust documents. The documents should be in a file; or better, they should all be stapled together as follows: Cover Page with the name of the trust on top then the listing of the documents: The Resolution to Adopt the Declaration of Trust, the Declaration of Trust, and the Appendix(s). He speaks to an officer of the financial institution. He says, “These documents declare the trust and all aspects of the trust relationship.” Usually, but not always, the officer will look it over and state that he will refer the matter to the legal department to examine the documents.

The financial institution will usually require an Employee Identification Number, but some banks will use the Social Security Number of the Trustee. One bank recently stated that they would not use the EIN, only the trustee’s Social Security Number. Once the legal department looks at the documents, the account is usually OK’d. The trustee will open the account with an EIN or his SSAN, depending on the institution’s requirements.

Getting an EIN “for banking purposes only” does not compromise the status of the trust as a non-legal entity. The EIN is “for banking purposes only” and serves merely as an identification number for the account, not an actual identifying number for employees; the common law or Bible trust has no employees since it is a relationship with property with certain characteristics, not some kind of organization. To obtain an EIN, the trustee must fill out and submit Form SS-4 to the IRS. The trustee should not apply for the EIN online because the online application can be used to argue that the trust is a legal entity. Even though this eventuality may never occur, the online application should not be used. The trustee is holding and managing the Lord’s property. He should strive to do all aspects of his duties correctly and with knowledge, wisdom, and understanding.

The trustee should not fill out the SS-4 improperly. The trustee should carefully fill in the SS-4 according to the instructions on page 2 of the SS-4 and which are explained in the detailed PowerPoint which I send him.  Filling out the form improperly may open the door to the argument that the trust is legal entity. For example, line 6 states, “County and state where the principal business is located.” A trustee, acting alone several years ago filled in that line, even though I sent him a PowerPoint explaining exactly how to fill out the form. I cleaned up the matter in my subsequent letter to the IRS explaining the reasons that form 1041 was not appropriate for the common law trust; but, since that experience, pastors, at my request, have sent me a copy of the completed form before submitting it. Now, I go over the form with the trustee, over the phone, after we have both pulled it up on our computers. One pastor, after we did this just a few days ago, found that he was unable to submit the form online.  Then, he discarded it and filled out the online application and submitted it without consulting me. He said that after filling out the application, he felt there were more pages, hit the wrong button, thereby submitting the application instead of going to more pages—there were no more pages. This was a mistake anyone could make, but this was a valuable lesson for us all. The IRS almost immediately emailed the trustee granting an EIN and stating that the trustee should yearly submit form 1041 (see below for more on this). I will soon draft a letter to the IRS explaining the common law trust and correcting the misunderstandings that could be raised by the online application.

The IRS sends a letter to all the trustees granting the EIN. The letter also informs that trustee that he must yearly submit IRS Form 1041, regardless of whether the application was correctly filled out or not. At this point, I draft and send, Certified Mail Return Receipt Requested, cc Trustee, the IRS a letter explaining why Form 1041 is totally inappropriate and inapplicable. The first time I encountered this matter was in 2017. Since then, every church receives such an instruction from the IRS. In every instance, I have submitted a letter of explanation to the IRS. That has taken care of the issue in every instance with no further IRS communication on the matter.

For more details on the matter of the EIN “for banking purposes only,” to include links to letters to the IRS regarding IRS Form 1041 and other matters, see Obtaining a Church Common Law Trust Employee Identification Number “For Banking Purposes Only.”

The account should not be classified as a “business” account. The trust is not a business, as the documents make clear. The account is more correctly a personal account since the trustee is the legal owner of the account, the Lord Jesus Christ the actual owner. Remember, as stated in the documents, the legal owner is bound to handle all properties (which includes money and bank accounts) in the trust estate solely for the benefit of the Lord Jesus Christ according to His will as given in the Bible, not for his own benefit. The documents make clear this and all relevant matters (to include that the trustee receives no compensation and therefore cannot be called an employee). Should the bank insist on opening a “business” account, the trustee should go to another bank.

Some, if not most, banks only have “personal” and “business” accounts. The trustee should examine the paperwork to make sure that he is not opening a business account. If the paperwork indicates that it will be a business account, the trustee should point out that the account is more correctly personal. The trustee, as legal owner, is opening the account. He has the fiduciary duty to manage the funds in the account for the beneficiary, the true, beneficial and equitable owner of the property (which included money and bank accounts) held in the trust estate solely according to the will of the beneficiary, the Lord Jesus Christ according to His will as given in the Bible.

What should the trustee do should the bank refuse to open the account as personal rather than business? Recently, two trustees had to face this dilemma. A trustee in Wyoming, with the permission of the bank, struck out all references to “business” on the agreement before signing it. In another case, the bank would not remove references to “business” on the agreement in order to open the account. However, bank officials assured the trustee and Jerald Finney that the business designation was for banking purposes only and that it did not declare that the trust was a business. The bank, as always, had examined the trust documents before agreeing to open the account; and those documents make clear that the trust can in no way be a business. The trustee opened the account, but plans to look for another bank in the area to see if he can get a properly designated account.

All trustees have been able to open a bank account. Most have had this success at the first bank they visited. Some have had to go to a second bank. Only one that I can recall has had to go to a third bank.

Remember to tell all givers to give to “[Name of Trust],” not to [Name of Church].

Always remember that I, as your servant in the Lord, am here to help in any matter. Please do not hesitate to contact me for any reason. God bless.

Lesson 6: The church Bible Trust relationship is not something new. Churches under Christ in every thing (under Christ alone) have, by definition, always honored it.

Jerald Finney
Copyright © January 1, 2022

Go to the following webpage for links to additional lessons:
Lessons on the Bible (Common Law) Trust

The purpose of this lesson and all ministry lessons is to glorify God. When one seeks Bible truth and presents what he believes to reflect that truth, the only motive that pleases God is love for the Lord and His truth. If you disagree with anything in this lesson, open minded debate is encouraged. Please do not become angry. Rather, engage this ministry in a Bible based search for truth (See, Ephesians 4:11-16), with the goal of glorifying God and finding the truth. Reasoning together should include the Bible principles and analysis of the common law or Bible trust as applied to the Bible principles. Open debate and honest study, with the Bible as the foundation, glorifies God, especially when considering the institution God loved and gave himself for. Respond in love as this and all lessons are inspired by love for God and His truth. I will publicly repent of any error which is revealed to me by love-centered discourse. God bless.
Ephesians 4:11-16: “And he gave some, apostles; and some, prophets; and some, evangelists; and some, pastors and teachers; For the perfecting of the saints, for the work of the ministry, for the edifying of the body of Christ: Till we all come in the unity of the faith, and of the knowledge of the Son of God, unto a perfect man, unto the measure of the stature of the fulness of Christ:  That we henceforth be no more children, tossed to and fro, and carried about with every wind of doctrine, by the sleight of men, and cunning craftiness, whereby they lie in wait to deceive; But speaking the truth in love, may grow up into him in all things, which is the head, even Christ:  From whom the whole body fitly joined together and compacted by that which every joint supplieth, according to the effectual working in the measure of every part, maketh increase of the body unto the edifying of itself in love.”

This short lesson, and the cited resources, explain:

  • That the Church Bible Trust Relationship recommended by this ministry is not new; the Lord Jesus originated it, describes it, and prescribes it in His Word.
  • New Testament churches, from the beginning of the church until this day, have always practiced the Bible trust relationship with property.
  • New Testament Churches, by honoring Christ “in every thing” have been vilified, abased, and persecuted, by other “churches,” and church-state establishments, to include those in America who combine with the state through incorporation (sole or aggregate), charitable trust status, Internal Revenue Code 501(c)(3) or § 508(c)(1)(A) tax exempt status, etc.

When a church organizes according to New Testament Church Doctrine, that church, as a spiritual organism under the authority of Christ in every thing, applies the Biblical concept of trust. See, Trust is a Bible Concept for explanation of the Bible Trust, its origins, and application by a New Testament Church. A church who wishes to remain under Christ in every thing, has no other option; there is only one way for a church to organize according to God’s Word. The organization can be explained in terms used by this ministry, in terms of the concept of the Bible (common law) trust. God’s Word is clear: a church who practices the concept pleases and glorifies God, and a church who does not do so arrogates the prerogatives of (blasphemes) God.

Churches in the New Testament, the first church—the Church at Jerusalem and all other churches in the New Testament—established and practiced a Bible trust relationship with property.  All property was owned by God, not the church. The churches remained spiritual entities only.

No church owned property; only a worldly temporal legal entity can own property. See, Short Answers to Some Important Questions. Churches never met on property they owned. Members gave to God, not to the church. They gave of God’s own, not of their own (See, Exodus 19:5; Leviticus 25:23; 1 Chronicles 29:10-13; Psalm 24:1; Psalm 50:10; Psalm 89:11; Haggai 2:8; Trust is a Bible Concept explains this in some detail). When they gave to God, their gifts were held and managed by a person or persons, according to the will of our Lord as given in His Word (See, e.g., Acts 4:32-5:11 as to the church at Jerusalem and the sin and death of Ananias and Sapphira). The church at Jerusalem remained holy—totally set apart for God and under God; as a result, the church had great spiritual power and multitudes of women and men were saved and added to the Lord (Acts 4:12-5:16).

Since New Testament times, there has always existed a remnant of churches who remained spiritual entities under Christ in all things. They were true to Bible distinctives concerning many matters, including the matter of separation of church and state. To be separate from the state, a church cannot own property or act as a legal entity in any other manner. Churches refused to contract with the state and the state religion.

Historically, Christians in such churches, as warned by Jesus and the apostles, have been persecuted. Christians were persecuted from the beginning of the church. After union of church and state in the fourth century, the original established “church” as well as her offspring, the Protestant establishments, working with the state, tried to stamp out “heretics” and eliminate all other religions, including authentic New Testament churches, and their members. See, God Betrayed/Separation of Church and State: The Biblical Principles and the American Application, pp. 127-132 for a brief history of those persecutions; see also, Persecution: A Consequence of Covenant Theology.

This persecution continued in the American colonies where a spiritual warfare between the dissenters, mainly Baptists, were persecuted by colonial established church-state unions. The result of that conflict was the First Amendment to the United States Constitution. America, with the adoption of the First Amendment became the second government in world history, of any lasting consequence, to grant religious freedom and soul liberty. Ibid., “History of Religious Freedom in America,” pp. 189-289.

Scores of churches in America have come to understand that Christ desires to be the only head or authority over churches who name His name; and, consequently, have established the Bible trust relationship with property. This Churches under Christ ministry has helped many churches to do so. Starting in the 1980’s, the Biblical Law Center, under the leadership of Attorney Al Cunningham, began to help churches come out from under civil government and establish Bible trust relationships with property.

A church can establish the relationship without a writing. However, should the trustee of the property owned by the Lord Jesus Christ wish to open a bank account to hold the funds in the trust estate, the trustee must show a written Declaration of Trust and related documents to the bank. Should the trustee with to purchase real estate for a meetinghouse, the property by owned by the Lord Jesus Christ, it is wise to have a Declaration of Trust which provides for the appointment of and transfers the powers of the trustee to a successor trustee. When this is done, successor trustees will have the authority to hold and manage the property. Merely holding title in the name of the Lord Jesus Christ, the title signed by “deacons” or some others, can lead to problems down the line. No matter the position given on the title, these deacons or others are acting as trustees. What happens should one or more of the trustees pass away. How will the property be transferred twenty-five or fifty years after purchase, the trustees are gone and the property needs to be sold or transferred?

Many of the trustees of trusts helped by this ministry have opened trust bank accounts or purchased real estate in the name of the trust. In every instance, they have showed the bank  or the seller of the real estate, title companies and lawyers, tax assessors (for property tax exemption purposes) the trust documents for their inspection. Those documents shine the light of Bible truth on many matters, thereby educated those in the world who had no idea of what a true New Testament church is. See, Lesson 4: The wisdom of a written Declaration of Trust. 

Courts in America have recognized the common law trust relationship with property, acknowledging that the relationship is not a legal entity but a defined relationship with property. Courts have held that property tax exemption cannot be withheld from property held in trust by churches and other religious organizations. See EN[i] for excerpts from and links to such cases. Here are some excerpts from the Endnote:

Indiana property tax exemption law specifically recognizes the trust relationship. Indiana Code Title 6. Taxation § 6-1.1-10-21 states:

Sec. 21 .  (a) The following tangible property is exempt from property taxation if it is owned by, or held in trust for the use of, a church or religious society:

(1) A building that is used for religious worship.

(2) The pews and furniture contained within a building that is used for religious worship.

(3) The tract of land upon which a building that is used for religious worship is situated.

Etc.

See, The Indiana Board of Tax Review Determines that Property Held in Trust for the Lord Jesus Christ Must Be Granted Property Tax Exemption for an essay chronicling a case testing the  church use of the Bible trust and a legal examination and decision by the Indiana Board of Tax Review. The Endnote also covers this in more detail. Property tax exemption on property used by churches, unlike federal tax exempt status, comes with no strings attached. It is just a courtesy which every state grants churches and other religious organizations.

WAUSHARA COUNTY v. Sherri L. GRAF, 157 Wis.2d 539 (1990), 461 N.W.2d 143, Court of Appeals of Wisconsin. Submitted on briefs December 8, 1989. Decided August 2, 1990states (see Endnote for more): 

  • “Church” and “Congregation.” A church consists of those who are communicants, have made a public profession of religion and are united by a religious bond of common spiritual welfare. It is the spiritual body, not the legal one.
  • In Franke v. Mann,106 Wis. 118, 131, 81 N.W. 1014, 1018-19 (1900), the court further said that “[w]hat has been said is in harmony with the law regarding trusts for religious uses, whether the trustees be officers of a religious corporation or of an unincorporated ecclesiastical body. . . .” Id.at 131-32, 81 N.W. at 1019 (emphasis added).
  • In Holm v. Holm,81 Wis. 374, 382, 51 N.W. 579, 581 (1892), the facts included that the Norwegian Evangelical Lutheran Church of Roche-a-Cree was a voluntary association until February 7, 1889. The court noted that “[p]rior to that date the title to the churches in which the members of the association worshiped was vested in trustees named in . . . deeds, and their successors in office. . . . The trusts imposed by such deeds appear to have been valid upon the principles stated by this court in adness v. Braunborg. . . .” Id.
  • In Franke v. Mann,106 Wis. 118, 131, 81 N.W. 1014, 1018-19 (1900), the court further said that “[w]hat has been said is in harmony with the law regarding trusts for religious uses, whether the trustees be officers of a religious corporation or of an unincorporated ecclesiastical body. . . .” Id. at 131-32, 81 N.W. at 1019 (emphasis added).
  • . We conclude that the trust constituted an “entity” which could claim tax exemption under sec. 70.11(4), Stats., for the benefit of the Basic Bible Church. We further conclude that the legislative history of the pertinent statutes does not disclose a legislative intent to require that a church or religious association be incorporated before it may claim tax exemption under sec. 70.11(4).

Note: In a Biblically correct trust relationship with property, the property is held in trust for the Lord Jesus Christ to be used according to His will as given in the Word of God, not the church, as is pointed out in these lessons.

God’s desires that churches should be holy, set apart for the Lord alone, totally separate from any worldly entanglement(s). See, for full Bible explanation, God Betrayed, pp. 1-188. The established church, the church who chooses to unite with civil government by contracting with the state, submits herself, to one degree or another, to an authority other than the Lord Jesus Christ. She works over, under, or with the state. Establishment contracts in America are unilaterally written into state law, and can be changed unilaterally, by the state or federal government without input from the church. The state makes an offer for churches to accept. The offer is written in a state or federal law.. The church can ignore the offer or accept it. When accepted, the completed contract—offer, consideration on the part of both parties (the state gets stated authority over the accepting church for many purposes and the church gets the “advantages” that come with being an artificial person under the Fourteenth Amendment; a person who can sue, be sued, enter into contracts, own property, pay salaries to hireling pastors, etc.), and acceptance. The contract gives the state authority over the church, but gives the church no authority over the state. The church is an established church.

An established church is unholy. She profaned herself by entering into an unholy union. Ibid., 125-188. She rejected God in order to be like the other churches. She became, in many ways, like other established churches, a business; and, with time, she becomes more and more business oriented, more and more worldly, and less and less heavenly. She has more and more earthly power, supposedly, but less and less heavenly power. A slide toward apostasy began when she chose to unite with the state by becoming a legal entity (a corporation (sole or aggregate), a charitable trust, of an Internal Revenue Code § 501(c)(3) or § 508(c)(1)(A) tax exempt religious organization, etc. See, Separation of Church and State/God’s Churches: Spiritual or Legal Entities? for explanation of legal entities and examination of church incorporation, and Internal Revenue Code § 501(c)(3) or § 508(c)(1)(A) tax exempt religious churches).

American believers, churches, Bible colleges, and seminaries who support state church establishment have ignored or never studied, and certainly have never applied, Bible doctrine which explains the Bible principles regarding the relationship of church and state. To them, the substance of this essay appears to be something new and never thought of before. They, as to these matters, are like the Jewish religious leaders in the New Testament who proclaimed to the Lord, and to the early Christians, that they were the authorities on Scripture. Their authority was tradition and they ignored Christ’s admonitions to “search the Scriptures,” for they thought they had done so. God could not convince those heretics of their error. Likewise, God (in His Word) cannot convince those who refuse to study Scripture to learn the truth about church organization as to the relationship of Christ and His churches. Instead, they attack those who proclaim the truth in the same ways as the Jewish religious leaders attacked Jesus and the apostles. The nature of the attacks never change.

Established churches are like Israel, the only God-ordained theocratic nation, who rejected God’s sole authority in order to be like “all the nations, … in order that [their king might judge them, go out before them and fight their battles].” (1 Samuel 8). They have chosen to give “Caesar” authority that belongs to God. God allows them, as He allowed Israel, to do this. As Israel lost the favor of God, so have most American churches who betrayed Him by choosing another head or heads. As Israel started down the road to apostasy, so have American churches except for a small remnant. Many American churches are at the end of that road. Many others are fast approaching it. See, The Biblical Doctrine of the Church, sections on apostasy. In the process, they cause the world to blaspheme God.


EN[i] A. Another Victory for a Church under Christ (092419) A local property tax board in Minnesota denied the property tax exemption for real estate used as a meeting house for a church which had established a trust relationship with property. The property was used 100% for church purposes. The only recourse, after trying to reason with the local assessor and county attorney, was for the trustee to file petition in court. The trustee prevailed, after filing of Motion/brief and oral argument, and without trial. The property tax exemption was granted. The redacted Motion/brief is linked to for one to examine.

  1. The Indiana Board of Tax Review Determines that Property Held in Trust for the Lord Jesus Christ Must Be Granted Property Tax Exemption (012319). This article involves a property tax exemption for a Trinity Baptist Springs Church in Trinity Baptist Springs, Indiana organized under a Declaration of Trust. The Pastor, with the help of the Biblical Law Center, represented himself. The article links to the video of the property tax hearing held by the local property tax board who decided against the exemption. The case was appealed to the Indiana Board of Tax Review who reversed and order that the tax exemption be granted.

Indiana property tax exemption law specifically recognizes the trust relationship. Indiana Code Title 6. Taxation § 6-1.1-10-21 states:

Sec. 21 .  (a) The following tangible property is exempt from property taxation if it is owned by, or held in trust for the use of, a church or religious society:

(1) A building that is used for religious worship.

(2) The pews and furniture contained within a building that is used for religious worship.

(3) The tract of land upon which a building that is used for religious worship is situated.

(b) The following tangible property is exempt from property taxation if it is owned by, or held in trust for the use of, a church or religious society:

(1) A building that is used as a parsonage.

(2) The tract of land, not exceeding fifteen (15) acres, upon which a building that is used as a parsonage is situated.

(c) To obtain an exemption for parsonages, a church or religious society must provide the county assessor with an affidavit at the time the church or religious society applies for the exemptions.  The affidavit must state that:

(1) all parsonages are being used to house one (1) of the church’s or religious society’s rabbis, priests, preachers, ministers, or pastors;  and

(2) none of the parsonages are being used to make a profit.

The affidavit shall be signed under oath by the church’s or religious society’s head rabbi, priest, preacher, minister, or pastor.

(d) Property referred to in this section shall be assessed to the extent required under IC 6-1.1-11-9

  1. KOPSOMBUT-MYINT BUDDHIST CENTER, v. STATE BOARD OF EQUALIZATION, 728 N.W. 2d 327 (1986) Court of Appeals of Tennessee, Middle Section, at Nashville. Permission to Appeal Denied, April 6, 1987. IMPORTANT POINT: Property held in trust for a Buddhist Temple qualifies for a property tax exemption, if the property is used for religious purposes and the owner, any stockholder, officer, member or employee of such institution is not lawfully entitled to receive and pecuniary profit from the operations of that property in competition with like property owned by others which is not exempt. Property held in trust and which otherwise qualifies for the exemption is to be exempted from property tax.  Of note, for emphasis, it was obvious that corporate, 501(c)(3) status was not a prerequisite for religious property tax exemption. Also, this case deals with a “trust,” not a “business trust” “charitable trust” or some other type of trust that is a legal entity.” As to the trust relationship, the court stated:
  • “A valid trust need not be in writing. It can be created orally unless the language of the written conveyance excludes the existence of a trust. Sanderson v. Milligan,585 S.W.2d 573, 574 (Tenn. 1979); Linder v. Little,490 S.W.2d 717, 723 (Tenn. Ct. App. 1972); and Adrian v. Brown, 29 Tenn. App. 236, 243, 196 S.W.2d 118, 121 (1946). However, when a party seeks to establish an oral trust, it must do so by greater than a preponderance of the evidence. Sanderson v. Milligan, 585 S.W.2d 573, 574 (Tenn. 1979); Hunt v. Hunt, 169 Tenn. 1, 9, 80 S.W.2d 666, 669 (1935); and Browder v. Hite, 602 S.W.2d 489, 493 (Tenn. Ct. App. 1980).
  • “The existence of a trust requires proof of three elements: (1) a trustee who holds trust property and who is subject to the equitable duties to deal with it for the benefit of another, (2) a beneficiary to whom the trustee owes the equitable duties to deal with the trust property for his benefit, and (3) identifiable trust property. See G.G. Bogert & G.T. Bogert, The Law of Trusts and Trustees 1, at 6 (rev. 2d ed. 1984) and Restatement (Second) of Trusts § 2 comment h (1957). We find that the Kopsombut-Myint Buddhist Center has proved the existence of each of these elements by clear and convincing evidence.” [p. 333].
  1. WAUSHARA COUNTY v. Sherri L. GRAF, 166 Wis.2d 442 (1992), 480 N.W.2d 16, Supreme Court of Wisconsin. Submitted on briefs October 4, 1991.Decided February 17, 1992.The Supreme Court of Wisconsin reviewed the evidence and concluded that “The evidence indicates that Basic Bible was established to evade taxation. Basic Bible failed to meet its burden of proving that it is a “church” or “religious association” under [Wisconsin law]. The court held that Basic Bible was not property tax exempt.” The fact that the church held “in trust” the property for which a property tax exemption was sought was not a factor in the decision.The Court concluded that incorporation and 501(c)(3) status is not a prerequisite for church property tax exemption; and, again, made clear that the fact that the church held the property “in trust” did not disqualify the church from property tax exemption. [My note. Many, many cases are on the record involving denials of “church,” or “religious organization” property tax exemption for incorporated 501(c)(3) tax scams. See, for some examples, III below. This is the only case I have found in which a “church” or “religious organization or society” which held property and/or money in trust was held to be such a scam. Also, by reading this entire case with knowledge, one versed in these matters readily sees that Basic Bible did not understand the law nor the Bible. One could write a lengthy analysis proving that. Also very interesting is the analysis of the pro se representation in this case.]

The Wisconsin Supreme Court stated, in its opinion from which the above was taken that:

  • The court of appeals had no obligation to look beyond the issues raised by Bible Baptist, but had the discretion to do so. The “church” was organized as a trust. The principle issue which it in its discretion addressed was the circuit court’s conclusion that for a ‘church’ to claim a tax exemption, it must be incorporated under the laws of Wisconsin or another state. The Supreme Court of Wisconsin agreed with the conclusion of the appeals court that the church need not be incorporated to claim a tax exemption.The Court stated: “We need not reiterate the excellent discussion and analysis underpinning that conclusion that appears in the court of appeals opinion. 157 Wis. 2d at 539-49” [the citation for this case].

The opinion from the court of appeals referred to by the Wisconsin Supreme Court was WAUSHARA COUNTY v. Sherri L. GRAF, 157 Wis.2d 539 (1990), 461 N.W.2d 143, Court of Appeals of Wisconsin. Submitted on briefs December 8, 1989. Decided August 2, 1990Here are some very important points made on pp. 539-49 of that decision:

We hold … that the church was not required to show that it was incorporated as a religious society or corporation under ch. 187, Stats., or otherwise, to establish that its property is exempt from taxation under sec. 70.11(4).

The court examined the legislative history of the pertinent statutes to determine if a church or religious organization must be incorporated for its property to be tax exempt [under state law]. The court started with examination of the first exemption from taxation of the property of churches and religious organizations—in sec. 24, ch. 47, Revised Statutes of 1849. Chapter 47 prescribed the procedure by which persons belonging to a church congregation or religious society, “not already incorporated,” could incorporate. … The exemption was not limited to religious societies incorporated under ch. 47.

The court then looked at Chapter 130, Laws of 1868 which provided for the assessment of property for taxation and for exemptions therefrom. Section 2, 3d exempted “[p]ersonal property owned by any religious, scientific, literary or benevolent association, used exclusively for the purposes of such association, and the real property necessary for the location and convenience of the buildings of such association . . . not exceeding ten acres. . . .” Chapter 130 did not define “association.” The court then went to Wisconsin Statutes of 1898. Section 1038, subd. 3 was renumbered sec. 70.11(4), Stats., by sec. 16, ch. 69, Laws of 1921. Throughout its history, the exemption from taxation of property of churches and religious associations has been accorded in substantially the same language. No “linkage” has existed between the exemption statutes and those affecting the organization of churches and religious associations or societies.

Chapter 411, Laws of 1876, provided for the incorporation of religious societies. Apparently this act replaced ch. 47 of the revised statutes of 1849. Chapter 411 is silent as to the taxation or exemption of the property of religious societies incorporated thereunder.

The procedures for the incorporation of religious societies were included in ch. 91, Revised Statutes of 1878. Nash’s Wisconsin Annotations (1914), sec. 1990, ch. 91 at 753, states:

The revisers of 1878 in their note said: “Chapter 411, 1876, is taken to have been intended as a revision of the law for the incorporation of religious societies. The privilege of organizing a corporation is extended to all classes and denominations, it not being supposed the law means to be intolerant of any religious belief or to be partial in its offer of privileges.”

The same annotation at page 755 states:

“Church” and “Congregation.” A church consists of those who are communicants, have made a public profession of religion and are united by a religious bond of common spiritual welfare. It is the spiritual body, not the legal one. But a religious society or congregation, under the statute, is a voluntary association of persons, generally but not necessarily in connection with a church proper, united for the purpose of having a common place of worship and to provide a proper teacher to instruct them in doctrines and duties, etc. [Citations omitted.]

Decisions interpreting ch. 91, Revised Statutes of 1878, make plain that failure of a church or religious organization to incorporate thereunder did not affect the power of the church or religious organization to hold title to property. “Under the repeated decisions of this court, we must hold that the mere fact that [a] church or religious society had not yet been incorporated at the time of the delivery of [a] deed in no way frustrated the trust thereby created, if such trust was otherwise valid.” Fadness v. Braunborg, 73 Wis. 257, 278-79, 41 N.W. 84, 90 (1889) (emphasis in original).

In Holm v. Holm, 81 Wis. 374, 382, 51 N.W. 579, 581 (1892), the facts included that the Norwegian Evangelical Lutheran Church of Roche-a-Cree was a voluntary association until February 7, 1889. The court noted that “[p]rior to that date the title to the churches in which the members of the association worshiped was vested in trustees named in . . . deeds, and their successors in office. . . . The trusts imposed by such deeds appear to have been valid upon the principles stated by this court in adness v. Braunborg. . . .” Id.

In Franke v. Mann, 106 Wis. 118, 131, 81 N.W. 1014, 1018-19 (1900), the court further said that “[w]hat has been said is in harmony with the law regarding trusts for religious uses, whether the trustees be officers of a religious corporation or of an unincorporated ecclesiastical body. . . .” Id. at 131-32, 81 N.W. at 1019 (emphasis added).

It is plain from these decisions that the court did not consider that the legislature, by offering to ecclesiastical bodies the advantages of incorporation, intended to impose corporate structure upon such bodies. The property of unincorporated ecclesiastical bodies was commonly held in trust for the benefit of the members.

The Basic Bible Church established that title to the real estate subject to foreclosure was held in the name of the trustees for the benefit of the church. We conclude that the trust constituted an “entity” which could claim tax exemption under sec. 70.11(4), Stats., for the benefit of the Basic Bible Church. We further conclude that the legislative history of the pertinent statutes does not disclose a legislative intent to require that a church or religious association be incorporated before it may claim tax exemption under sec. 70.11(4).