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Chapter 1: Analysis of the title to and first two paragraphs of Chapter 18 of “Approved by Man”

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Chapter 1: Analysis of the title to and first two paragraphs of Chapter 18 of “Approved by Man”

Thank you, ELC, for waking up our brain cells.
Thank you, ELC, for waking up our brain cells.

Jerald Finney
Copyright © November 6, 2014

The ELC article, Chapter 18 of Betrayed by Man, begins with two paragraphs. Thereafter, it is divided into titled sections. This chapter will analyze the title and then the first two paragraphs.

The reader should especially notice that this chapter reveals that the ELC method of church organization has, by published ELC admission and according to ELC criteria for what gets a church into trouble, gotten ELC churches into trouble. The ELC method gets churches into the legal system, whereas the BLC method they attack does not.

Approved by Man: A Case for Biblical Reasonableness” by John R. Wright and Benjamin E. Townsend, leaders of the Ecclesiastical Law Center (“ELC”)), was published in 2009. Concerning the ordinary trust and the DOT, only the teachings of the Biblical Law Center (“BLC”) and this Old Paths Baptist Church “Separation of Church and State Law” ministry or those of the ELC are correct – the teachings are mutually exclusive. The ELC has publicly made this an issue. The ELC has also publicly attacked people who promote the ordinary trust including pastors, churches, and the Biblical Law Center. This booklet corrects the false ELC teachings concerning the ordinary trust and Declaration of trust; and also exposes the ill advised recommendations for church organization by the ELC for what they are.

This chapter analyzes the title to and first two paragraphs of Chapter 18, “Should a Church Be Placed In a Declaration of Trust?” which is also on the home page of the ELC website (ELC website: http://lordshipchurches.info/). Chapter 18 is analyzed paragraph by paragraph and section by section.

Analysis of the title to the chapter

173FlashABManThe title to Chapter 18 – “Should a Church Be Placed In a Declaration of Trust?” – should alert anyone with any knowledge of the subject that the author of the chapter may not understand the ordinary trust and the Declaration of Trust. One cannot “place a church in a Declaration of Trust.” A Declaration of Trust (“DOT”) is merely a document which creates an ordinary trust, a relationship whereby a trustee is to hold property for the benefit of the true or equitable owner of the property. The DOT is one manner in which one may set up an ordinary trust which is not a legal entity (or some other type of trust such as a Business Trust or Charitable Trust, both of which are legal entities). One may establish an ordinary trust with or without a DOT. In fact, when a church – as does an ELC church – entrusts tithes, offerings, gifts and/or property to a pastor or other person(s) for the benefit of the true owner, the Lord Jesus Christ, that church has established a trust with the pastor as a trustee; for a church to so establish a trust relationship without a DOT is unwise. For example, when an ELC church holds property in the name of the Lord Jesus Christ, the church, by the pastor, acts as a legal entity by signing the deed; that pastor is the trustee of a trust. This will be explained in detail in this series of articles. The better practice is to declare an ordinary, non-legal entity trust through a properly executed DOT. See The Only Way a Church Can Organize to Remain a New Testament Church for more on the Bible principle of trust and reasons for the wisdom of adopting a properly drafted and executed DOT.

The ordinary trust is described in Volume 76 of the legal encyclopedia AMERICAN JURISPRUDENCE 2d. “Is the ordinary trust a legal entity?” explains why this ordinary trust is not a legal entity; this question is important because the ELC insisted for years that the ordinary trust utilized by BLC churches and the Old Paths Baptist Church Separation of Church and State Law Ministry (SCSLM) was a legal entity. Only after the first 8 chapters of this booklet were published online did Ben Townsend, against public revelation of solid fact which cannot be refuted, relent and admit that the ordinary trust is not a legal entity. Chapter 13 of this booklet addresses an article written by Ben Townsend after the first 8 chapters of this booklet were published in which he finally admitted that the “trust” is not a legal entity.” Read chapter 13 to find Townsend’s ridiculous slant after that admission and this author’s response: this author actually countered Townsend’s slant in 2008 as chapter 13 reveals.

Other articles in this series fully explain the ordinary trust which is also explained in Section VI, Chapter 7 of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application which is available free in online and PDF form. See Order Information for Books by Jerald Finney should you desire to get a softback copy. One of the many flaws in the legal research and analyses of the ELC is that they indiscriminately grab out of context statements from court cases, legal encyclopedias, etc. and just make up fictitious and incorrect law to attack the ordinary trust and DOT. As will be seen as Chapter 18 of Townsend’s book is analyzed in this and subsequent chapters, the ELC, for example, uses the law of business trusts and incorrectly applies it to the ordinary trust.

Analysis of the first paragraph

Approved by God, p. 149
Approved by God, p. 149

The article begins by saying, “We believe it [the DOT] will get churches into trouble.” Ben Townsend, an ELC leader, has gone so far as to mount a dishonest online attack against a church which places tithes, offerings, gifts and property in a trust whereby the trustee of that trust has a fiduciary duty to use the monies and properties for the benefit of the true owner of the property. The DOT has never gotten any church into trouble, although Ben Townsend has lied and stated that it has. ELC churches have to, as Wright/Townsend state in Chapter 3, page 35 of Approved by Man, “handle legal church problems.” In that chapter, Townsend not only reveals that ELC churches must go to court but also falsely leads one to believe that he can represent churches in court. He is not an attorney and he cannot represent anyone or any entity in court because he is not a lawyer. Furthermore, he is not qualified to do so; nor is he qualified, as is obvious from the analysis of Chapter 18, to do legal research, especially, as he puts it, “intense legal research.”

In Chapter 3 of Approved by Man, Townsend speaks of lawsuits involving ELC churches, tax on property of an unincorporated church, and inspections of the “church’s building.” Using Townsend’s reasoning, the ELC method admitedly gets churches into trouble all the time. Unlike the ELC churches referred to in Chapter 8, a church which places tithes, offerings, and gifts into an ordinary trust as recommended by the BLC and the SCSLM is not a legal entity which cannot be taken into court or agency process; the DOT and the ordinary trusts thereby created have kept BLC churches out of legal problems and legal actions. Chapter 3 makes clear that an ELC churches own property, can and have been taken to court, and are therefore legal entities. Because churches in general enjoy favorable public sentiment and have protections which no other institution or entity has, there has not been an in depth and dedicated study of ELC methods by government lawyers and ELC churches have not been called for what they are – legal entities who have given up much of their biblical and First Amendment protections. One should note that governments still allow sales and property tax exemptions for all churches whether legal entities or not. When a local tax board challenges a “religious use” tax exemption on property on which a local church meets, the ELC church must go through the agency process (and appeal to court, if necessary); but in a property tax challenge against trust property utilized by a BLC or SCSLM church, the church cannot be brought into the process – rather, the pastor/trustee of the trust represents the trust in obtaining the property tax exemption. To this point, no property utilized by a BLC or SCSLM trust has been denied the exemption.

The third sentence to the paragraph then states: “Pastors, Deacons, and other Christians must realize the background of this document in law, and refuse to allow the church and church property to be placed into such a document.” This sentence is totally wrong. What is important for believers to know about the ordinary trust are the biblical principles regarding trust and what the ordinary trust and the document establishing it are. See Spurious rationale for incorporating: to hold property for a biblical and legal analysis of the ordinary trust.  Contrary to the ELC assertions, believers do not place any money or property in the document, the DOT. The DOT merely declares the trust. If a church is organized according to biblical principles, there is no church property. Rather, the members of the church (who are the church) give tithes, offerings, and gifts to God and those monies/properties make up the trust estate. The true owner, as declared in the DOT, is the Lord Jesus Christ. The person who is to administer the monies/properties is the trustee (the legal owner – the person who signs deeds, vehicle titles (if any), etc. as trustee. This is necessary since the Lord is not now physically present on earth and has therefore left believers with the fiduciary duty to handle His property and monies for His benefit (for the Glory of God). The trustee has a fiduciary duty to manage the monies/properties for the benefit of the true owner.

The last sentence of the first paragraph in Chapter 18 of Townsend’s article states: “More than that, a pastor must not allow himself to sign a document referring to himself as the ‘Trustee’ which represents the church.”

From page 149 of  ELC book
From page 149 of ELC book “Approved by God”

First, that sentence is ludicrous when delivered by Townsend because pastors of Townsend’s ELC churches are trustees who represent the church. On pages 149 and 150 of the ELC book Approved by God are the following statements: “The property [of an ELC church] should be held in trust for the Lord Jesus Christ, who is the true and beneficial owner” (p. 149); and “Actually, the church, by the Pastor, can execute a deed on behalf of the Lord Jesus Christ, so that isn’t a viable difficulty” (p. 150). These statements make clear that the church is set up to be a legal entity because the church is the legal owner of the property and the true and beneficial owner is the Lord Jesus Christ.

From page 150 of
From page 150 of “Approved by God”

On the other hand, the last sentence of the first paragraph of Townsend’s article above is wrong on two accounts as applied to the ordinary trust: (1) it is wise for a pastor/trustee of an ordinary trust to hold money and property for the benefit of the true owner, the Lord Jesus Christ; (2) the pastor/trustee is the legal owner of the property and the Lord Jesus Christ is the true and beneficial owner:

“The trustee of an ordinary trust is the person appointed to execute a trust, and the one in whom an estate, interest, or power is vested, under an express or implied agreement to administer or exercise it for the benefit of another. In other words, a trustee is a person who holds legal title to property under an express or implied agreement to apply it, and the income arising from it, to the benefit of another.” [Bold emphasis mine.]

In other words, the trustee of the ordinary trust has a fiduciary duty to administer or exercise the property for the benefit of the true or equitable owner of the property, the Lord Jesus Christ. This is something entirely different from “representing the church.” A pastor/trustee who holds tithes, offerings, gifts, and property in the name of (for the benefit of) the Lord Jesus Christ has this fiduciary duty in the trust relationship established by a Declaration of Trust.

On the other hand, as Townsend admits in his writings, the pastor of an ELC church acts as the trustee of “church property” even though such declaration is not in a DOT (See, e.g. pp. 149-150 of the ELC book Approved by God which are photographed and inserted above.). ELC publications demonstrate that the ELC methodology clearly establishes a type of trust which is a legal entity, relegates ELC churches to legal entity status, makes the pastor of the ELC church trustee of “church property” thereby representing the church. One could admonish Townsend as follows: “The results of the first microscopic examination of ELC methodology now published in this booklet clearly prove:

“Legally and biblically, the ELC, under your leadership, puts pastors in the position of trustees who represent ELC churches – the very thing you wrongly accuse the BLC of doing through the use of the DOT and the ordinary trust thereby created. Because of this and other flaws pointed out in this booklet, the ELC needs a Bible believing, born-again lawyer who has thoroughly studied the Bible and trust law and is motivated by the love of God, not money, to help you straighten out the mess established by the ELC.”

Both the BLC and the SCSLM utilize the impeccable method which was conceived by Attorney Al Cunningham who obviously put the system under a legal and biblical microscope before implementation. The BLC and now the ELC method have both been put under a legal microscope by another attorney, Jerald Finney. Finney published his conclusions concerning the BLC methodology a long time before taking on the task of microscopic examination of the ELC attacks against the BLC and the ordinary trust recommended by the BLC.  He found that the law and the Bible prove that Al Cunningham’s ordinary trust arrangement is on solid biblical grounds and keeps a church out of the legal system. To have lied about his conclusions and the law would have dishonored the Lord. Had Finney concluded that the BLC methods were flawed, he would have informed the BLC, just as he is now informing the ELC that they have created a mess.

Microscopic examination by two lawyers has proved the BLC method to be flawless. Microscopic examination by one lawyer has proven the ELC method to be flawed both biblically and legally. The biblical and legal reasoning supporting the conclusions concerning the problems with the ELC way of doing things are clearly stated in this booklet. ELC responses to the arguments in this booklet have been facetious at best.

Understanding that the ordinary trust is not the  church and the church is not the ordinary trust is important. The church does not own the money/property held in the trust (the trust estate). Church members give to God and what they give is held in the trust estate. Money/property has to be held somewhere, by someone. In this case the trust estate holds the money/property which is owned by the equitable owner, the beneficiary. The trustee has legal title to the money/property, but he is to use it for the benefit of the true and equitable owner, the Lord Jesus Christ. Again, this is in contrast to the unbiblical method used by the ELC by which tithes and offerings are given to the church, not to God, and “church property” is held by the church through a pastor/trustee.

Analysis of the second paragraph

The ELC then alleges that the attorney who “came up with this document” (the DOT) “could only think of a legal remedy for church problems, and not a Biblical remedy.” No one should  speculate as to the thought processes of that attorney who is now deceased. What is important is the applicability of the method from a biblical perspective. As has already been shown in this chapter, the remedy of the ELC is legal, not biblical and only the unqualified could have come up with such totally chaotic methodology. They have gotten away with their nonsense because no one, until this time, has examined some of their teachings with a “legal microscope.” One can imagine what examination of all their teachings by a qualified legal analyst would reveal.

A biblical and legal analyses of the issues can be found in God Betrayed (see the link above above). The facts, citations, and reasoning supporting the conclusion that the ordinary trust is ideal for an American church are in the writings and teachings on this “Separation of Church and State Law” website. Section VI, Chapter 7 of God Betrayed explains the ordinary trust and the DOT. The first three sections of God Betrayed lay out the biblical doctrines of government, church and separation of church and state; and Section VI, Chapter 7 looks at both biblical and legal precepts concerning the ordinary trust and compares the ordinary trust to incorporation (2 entirely different things) and shows why the ordinary trust is biblical.

The ELC then states, “We believe that this attorney used an existing legal document and applied it to unincorporated churches so that they could hold property without coming under the jurisdiction of the state.” Wrong. The attorney took the concepts of ordinary trust and drafted a Declaration of Trust which declared an ordinary trust. The church who places tithes, offerings, and gifts into the estate of such a trust does not hold property. The trust estate holds the property. The true, beneficial, and equitable owner of the property is the Lord Jesus Christ. Placing God’s money and property in an ordinary trust keeps a church under the Lord Jesus Christ only and out from under civil government jurisdiction if the church is careful not to place herself under state jurisdiction in some other way. One should keep in mind that a church who holds property, opens a bank account, takes out insurance, or does some other legal act forfeits her New Testament and First Amendment status.

The purpose of the ordinary trust is to assure that there is no church property and that all properties and monies in the trust estate are administered by the trustee for the benefit of the true owner of the property (the Lord Jesus Christ). A properly worded “Resolution to Adopt a DOT” and a properly worded DOT makes clear that the trust estate is owned by the Lord and that there is no church property.

A court/agency will assume jurisdiction over a controversy concerning money or property only if the dispute is properly brought to attention of the court/agency with jurisdiction over the matter. If a legitimate action is properly brought to the attention of an appropriate court or agency, the court or agency will assume jurisdiction no matter how the property/money is held and no matter who owns the property/money. In such an action, the court will seek out the legal owner and if none is found, the court or agency will take the necessary steps to get the property/money to a legal owner. Should a church hold/money property, that church is the legal owner and the church is a legal entity; this is the case of an ELC church, but not so with a BLC or SCSLM church. When money/property is put into the trust estate of an ordinary trust, the trustee is the legal owner and the Lord Jesus Christ is the equitable owner. A court cannot bring a church into such a legal controversy if that church places tithes, offerings, and gifts into a trust administered by a trustee where the beneficiary is the Lord Jesus Christ (as long as the church does nothing that makes that church a legal entity).

The elements of the ordinary trust and the DOT recommended by attorney Al Cunningham not only comply with Bible principles, but also incorporate the elements of a DOT and “trust” explained in American lawbooks such as 76 AM. JUR. 2D, Trusts and the DOT guidelines in the accompanying forms volume. “Declaration” means: “Publication, manifestation; as the declaration of the greatness of Mordecai. Esth. X.; A public annunciation; proclamation; as the Declaration of Independence, July 4, 1776” (MERRIAM WEBSTER’S AMERICAN DICTIONARY OR THE ENGLISH LANGUAGE (1828) definition of “DECLARATION.”). Declaration of Trust is defined as follows:

“The act by  which the person who holds the legal title to property or an estate acknowledges and declares that he holds the same in trust to the use of another person or for certain specified purposes. The name is also used to designate the deed or other writing embodying such a declaration” (BLACK’S LAW DICTIONARY 408 (6th ed. 1990) under definition of “Declaration.” This definition is consistent with the definitions in more authoritative legal references such as AM. JUR. 2D and C.J.S.).

76 AM. JUR. 2D Trusts § 65
76 AM. JUR. 2D Trusts § 65

The words in the DOT which Cunningham used are unique and are not found in any lawbook. As to the use of express or particular words or phrases to create a trust:

  • “No particular words are necessary to create a trust if there exists reasonable certainty as to the intended property, object, and beneficiary. Further, the purpose and intention, rather than the use of any particular term, determines whether a valid trust has been established. An express trust may be created without the use of technical words. All that is necessary are words or circumstances which unequivocally show an intention that the legal estate is vested in one person, to be held in some manner or for some purpose on behalf of another.
  • “Any statement that shows the ownership or control of property is vested in one person for the benefit of another is sufficient to create a trust, and it is not necessary that the words ‘trust’ or ‘trustee’ be used. Furthermore, even where present, the mere use of the words ‘in trust’ by the parties is not sufficient alone to create a trust, nor does the mere designation of a party as ‘trustee’ create a trust. Absent indications to the contrary, a conveyance using the words ‘for the use of’ or ‘for the benefit of’ demonstrates the intent to create a trust.” (76 AM. JUR. 2DTrusts § 65 (2007)).

As will be shown below, the a church which utilizes the ELC method creates a trust which is a legal entity (perhaps a charitable trust or business trust). The trust which is recommended by the “Separation of Church and State Law” ministry is not a legal entity as explained in the article Is the ordinary trust a legal entity?

Thus, the holding of property by a person (trustee) “in the name of the Lord Jesus Christ,” creates a trust. This is a very important for ELC churches to understand since the ELC recommends that property be held by the church (pastor) in trust for the Lord Jesus Christ, the true and beneficial owner and that the church can hold property (e.g., execute a deed) by the pastor, in trust for the Lord Jesus Christ. (See their exact wording below.) The legal system requires a legal tie to real estate as expressed in a deed. If no such tie to real estate exists, and this fact is brought to the attention of the proper court, the court will make sure that a legal entity, such as a person, assumes ownership of the property. Should a controversy arise as to ownership of the real estate, the legal system when properly petitioned will take jurisdiction over the matter. When real property is put up for sale, the buyer is going to want legal assurances that he is getting valid, enforceable legal and equitable ownership.

The ELC states that property may be held in three ways “(1) as a corporation, (2) as an unincorporated association and:

“(3) as an individual. How can property be held to reflect the ownership of Christ over His church? It must be held as an individual, and that individual must be the Lord Jesus Christ! The property should be held by the church in trust for the Lord Jesus Christ, who is the true and beneficial owner. In spite of the skepticism of many, churches in 22 states have placed their property in the name of the Lord Jesus Christ without incident” (Approved by God: A Case for Modern Disetablishment, by Wright/Townsend, page 149). The book goes on to say that “the church, by the Pastor, can execute a deed on behalf of the Lord Jesus Christ.” Ibid., 150.

The ELC are confused since they first say that the property must be held by the Lord Jesus Christ and then they say that the property should be held by the church in trust for the Lord Jesus Christ. Of course, property cannot be held by the Lord Jesus Christ since he left all earthly temporal property to be held in trust by man and has given civil government the ultimate jurisdiction over that land. If a nation honors God and His precepts, that nation will also honor God’s churches, and vice versa. If a believer or church is found out in North Korea (and many other nations), any properties which the believer owns will be confiscated and the believers will probably be executed. God allows individuals, families, churches, and nations free will to honor or dishonor him, for the time being.  The ELC, in the above statement, also says that the church, is to hold the property.

From ELC book
From ELC book “Approved by God,” p. 149

The ELC states the elements of a trust, and then make clear that the trust they recommend is a legal entity through which the church holds property thereby making the church the legal owner of the property. Some of the words of the ELC quoted above is taken straight out of legal books which define the ordinary trust, but other words compromise the trust and establish it as a legaL entity. They then say, “Held by the church in trust for the Lord Jesus Christ.” (Bold emphasis mine). For a church to hold property violates biblical principle. (See The Biblical Doctrine of the Church and The Biblical Doctrine of Separation of Church and State). Not only that, only a legal entity can hold property. There must be a legal owner of property, even if the legal and true and beneficial owner are not the same. They do not realize that they are in effect stating that the church is a legal entity.

The above illustrates that the ELC recommends compromising the position of a church who uses their method. They state that the church is to “hold the property in trust for the Lord Jesus Christ, who is the true and beneficial owner.” By so stating, they make clear that the church is the trustee of the property which is held in a legal entity type of trust; this argument is strengthened by the fact that, in their attacks against the ordinary trust they incorrectly rely on the law of business trusts as will be shown below. To repeat:

“The ELC teaches that the trust is a legal entity. They are partially correct in that some types of trusts are legal entities. However, the ELC does not quote from the law concerning ordinary trusts as to the legal entity status of the ordinary trust (see above). They do this to establish their incorrect position that the trust utilized by the BLC and this ministry are legal entities. They quote from the law concerning, for example, business trusts. See pages 175-177 of Approved by Man: A Case for Biblical Reasonableness by Wright/Townsend, for an example of where they quote from the law of business trusts and apply it to the ordinary trust. In American Jurisprudence, the law of business trusts is covered in volume 13 whereas the law concerning ordinary trusts is covered in volume 76. The two types of trusts are very distinct types of trusts.”

Thus, the ELC, in their zeal to discredit the ordinary trust, have in fact discredited their own methodology; they create a type of  trust which is a legal entity which can act legally, sue, be sued, go into debt if so desired , and enter into contracts (the ELC teaches against a church going into debt and entering into contracts.). Since they declare that the church is to hold the property for the true owner, they are declaring that the church is the trustee and, therefore the church has to be a legal entity. Only a legal entity can hold property; a spiritual entity cannot hold property. The trustee of a trust holds legal title and the beneficiary holds true or equitable title to property.

The ELC then states that “the church, by the pastor, can execute a deed on behalf of the Lord Jesus Christ.” Suffice it here to say that the ELC claims that the church can execute a deed. Only a legal entity can execute a deed. At the same time, they state that the church executes the deed by the pastor. Thus, the pastor effectively serves as trustee, but trustee of what kind of trust? Not a non-legal entity ordinary trust which is something they do not understand and therefore attack. He serves as trustee of a legal entity and that legal entity is the church he signs for.

Public sentiment and the lack of legal action against churches protects churches from legal scrutiny. For the foreseeable future, ELC churches do not have to worry about attacks. There are many situations, even outside the church-state context, where the legal system has not been alerted to some improprieties and therefore has not taken action. Consider the actual situation in which the owner of property has been dead for years and the man living on the property has paid the taxes for years. As long as he keeps up on the taxes and no one takes the issue to court, the man will be able to enjoy the property. Should an ELC church ever be in the legal sights of government lawyers, the ELC has subjected churches who use its methods to a compromised position and sharp government lawyers may pierce their armor. More importantly, the ELC, by not proceeding according to knowledge, wisdom, and understanding, has unknowingly dishonored the Lord.

As a sidenote, it is incorrect to say that property may be held as an individual, corporation, or unincorporated association. The correct way of putting it is that property may be held by or in the name of an individual, corporation, or association.

Finally, the last sentence in the paragraph says, “Since his passing, the Declaration of Trust has evolved into a magic talisman of mystic proportions, designed to fill all the needs of a local church.” That sentence is patently absurd. The author, the pastors, and the believers the author knows and who place tithes, offerings, and gifts into an ordinary trust established by a Declaration of Trust do not believe in magic. Those who put their tithes and offerings in an ordinary trust estate for the benefit of the true owner of all properties, the Lord Jesus Christ, know that the trust established by the DOT is only one piece of the puzzle. There are many ways in which a church can compromise the headship of the Lord Jesus Christ over a church. And even though they believe that the Lord Jesus Christ is the only one who can fulfill all their needs, their focus is not on themselves and their needs but on obedience to His statutes and precepts. More importantly, they believe that all they do should be for the Glory of God.

Chapter 3: Analysis of “Why such a strong stand against the Declaration of Trust?”

Contents of the Booklet

Related articles:

Chapter 3: Analysis of “Why such a strong stand against the Declaration of Trust?”

Jerald Finney
Copyright © November 13, 2014

Note. This is a continuation of the examination of Chapter 18 of Approved by God, a chapter which attacks the ordinary (Bible) trust, written by Ben Townsend of the Ecclesiastical Law Center (“ELC”). This article looks at the second section of that chapter.

Navigating a particular law in the legal system is not as easy as it might seem. Here is a rack with the volumes from AM. JUR. 2D AND AM. JUR. 2D forms. This is only a good starting place to understand the law of trusts.
Navigating a particular law in the legal system is not as easy as it might seem. Here is a rack with the volumes from AM. JUR. 2D AND AM. JUR. 2D forms. This is only a good starting place to understand the law of trusts.

The ELC begins this section by stating that that the “Declaration of Trust” (“DOT”) is a trust document. That is true. The DOT is a document which creates a trust. They are not right about their strong stand against the DOT based upon that fact. As shown below, it is ironical that the ELC has declared that the method they use establishes a type of trust. See Analysis of “The Questions will keep coming,” the last section of Chapter 18 of Approved by Man; that is, the ELC has declared a trust for those using their methods, but their trust must be a business trust or some other kind of trust because they quote from the laws dealing with various kinds of trust, but never from trust law covering the ordinary trust such as 76 AM. JUR. 2D Trusts. They exemplify this in the very section being analyzed in this chapter.

The ELC never quotes from this volume when attacking the ordinary trust, and this is the volume that explains the ordinary trust.
The ELC never quotes from this volume when attacking the ordinary trust, and this is the volume that explains the ordinary trust.

They quote nothing from 76 AM. JUR. 2D Trusts which explains the law of ordinary trusts. Rather, they quote for 13 AM. JUR. 2D Business Trusts. There are considerable differences between an ordinary trust and a business trust, some of which are explained in Is the Ordinary Trust a Legal Entity? Again, there are various kinds of trusts. Some are legal entities. Business trusts and charitable trusts, for example, are legal entities. The ordinary (Bible) trust is not.

Honest research requires finding the right law.
Honest research requires finding the right law.

To repeat a very important fact, the ELC has a Declaration of Trust. It is in print. This will be shown below by quoting word for word from their own published books. You can look at their declaration and their source definitions and see if this is the truth about this matter or not. The type trust they recommend (without realizing it) must make a church who utilizes their method a legal entity. That means that, as a legal entity, that church is partially under another head other than the Lord Jesus Christ. Of course, as long as no one makes an issue of it, the church so organized may continue without interference. In the meantime, only the Lord Jesus Christ is grieved because His church has unknowingly submitted herself to civil government.

Click the above to go to online version of God Betrayed.
Click the above to go to online version of God Betrayed.

The following quote is from Section VI, Chapter 1 of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application, pages 351-352:

  • “It is impossible for a New Testament Church to remain a New Testament church if that church chooses to do one thing which may result in legal subjection to the civil government. In other words, when a New Testament church does anything contrary to Scripture which gives even partial claim of sovereignty over that church to the state, that church has committed a wicked act which subjects her to another head, thereby greatly displeasing the Lord. That church has betrayed the Lord.
  • “Doing one thing that subjects a church to the state creates a legal entity. “Legal entity” means: “Legal existence. An entity, other than a natural person, who has sufficient existence in legal contemplation that it can function legally, be sued or sue and make decisions through agents as in the case of corporations.” (BLACK’S LAW DICTIONARY 893-894 (6th 1990), definition of “legal entity.”)
  • “Corporations are legal entities. On the other hand, a pastor/trustee may hold legal title to real and/or corporal personal property for the benefit of the Lord Jesus Christ through a Declaration of Trust without having created a legal entity. Such a trust relationship cannot sue or be sued. ‘Any kind of property, whether real or personal, freehold or leasehold, and any interest therein, whether legal or equitable, may be impressed with a trust. While the question of what property is made subject to a trust is determined by the terms of the trust, as a general proposition a property interest must be transferable to be the subject of an express trust.’ 76 AM. JUR. 2D Trusts 247 (2007). Personal property includes movable and tangible things such as furniture, merchandise, etc., (BLACK’S LAW DICTIONARY 1217, definition of ‘Property.’) ” [Bold emphasis mine.]

For many reasons, a church placing tithes, offerings, gifts, and properties in an ordinary trust (which is a non-legal entity) – as opposed to placing tithes, offerings, gifts, and properties into a legal entity such as a corporation, a business trust, charitable trust, or any other legal entity – is the perfect biblical way to do so. Remember, as pointed out in various places in this booklet, that the true, equitable, and beneficial owner of the trust estate of the ordinary trust utilized by the BLC and by the SCSLM is the Lord Jesus Christ, not the church and not the trustee. The Endnote below links to the entirety of Section VI, Chapter 7 of God Betrayed; that chapter explains the Declaration of Trust and the ordinary trust, and compares incorporation with the ordinary (Bible) trust and proves that they are entirely different. It explains in detail exactly what each is.

The ELC in the section being analyzed, “Why such a strong stand against the Declaration of Trust?” starts with the statement, “This is simple. It is a ‘Trust’” etc. In other words, the ELC is stating that they take such a strong stand against the DOT because it is a trust. They then give the definitions of “Declaration of Trust” from a hodgepodge of sources:

(1) LegalCentral.com:

 “A Declaration of Trust (sometimes called a Bare Trust) is one of many types of Trusts available… A Declaration of Trust is a legal structure that allows the division of the beneficial and legal ownership. The person holding the asset for your benefit is the Trustee. The Trustee has legal ownership only. You are the beneficiary. You have beneficial ownership. Provided you are 18 years of age and of sound mind you boss the Trustee around. You tell the Trustee what to do with your asset.” (The comments of the author: This quote deserves the trashcan. A DOT is not a trust. It is the instrument that creates a trust. The statement has some truth and a lot of garbage. Anyone with any legal knowledge of trust law can only laugh at this statement.)

(2) Thompson-Gale Legal Encyclopedia:

“An Assertion by a property owner that he or she holds the property or estate for the benefit of another person, or for particular designated objectives.” (Comment: Another useless statement.)

(3) Barron’s Real Estate Terms:

“A written statement by a Trustee to acknowledge that the property is held for the benefit of another.” Then Barron’s gives an example which says: “A Declaration of Trust was signed by a Trustee to state that certain valuable land was being held in Trust for certain orphaned children.” (Comment: Another statement grabbed out of context that has no definitive value to the invalid point the ELC  is trying to make.)

(4) Wikipedia:

“In Trust Law, a settler who declares that he holds certain property on trust is said to make a ‘Declaration of Trust.’”

The ELC quotes here from 13 AM. JUR. 2D Business Trusts. That is the wrong volume to research the ordinary trust.
The ELC quotes here from 13 AM. JUR. 2D Business Trusts. That is the wrong volume to research the ordinary trust.

(5) . “American Jurisprudence 2d explains this Declaration of Trust under Business Trusts, 13 Am.Jur2d, section 1:

“A business trust is formed under, or on the basis of, an instrument or declaration of trust, which must conform to statutory and other requirements relating to trusts. No special form need be followed in creating a Massachusetts or business trust. It is even possible to create such a trust without the use of the word ‘trust’ or ‘trustee,’ where the intention to do so appears from the instrument as a whole. The trust instrument should, however, embody all the elements necessary to constitute a business trust. There should be an unequivocal declaration of trust, a vesting of title in named trustees, a description of the character of the business to be carried on, an outline of the powers and duties of the trustees, provisions for the tenure and election of trustees and for the issuance of certificates of beneficial interest and the transfer thereof, with a statement of the rights of shareholders with respect too profits and dividends. If desired , there may be provisions fixing the term and duration of the trust and limitting or negativing the liability of shareholders and trustees to third persons. The members and trustees are entitled to have the trust instrument applied according to its terms, so long as it does not offend the law or public policy of the state.” [Bold emphasis mine]

The ordinary trust may be distinguished from the business trust in many ways. A few follow. The ordinary trust is very different from the business trust described in 13 AM. JUR. 2D Business Trusts. In an ordinary trust, unlike a business trust, there is no business to be carried on, trustees are not elected and provisions in the DOT provide for a successor trustee in the event the trustee wishes to step down, become incapacitated, die, etc., there is no beneficial interest and the transfer thereof, there are no shareholders, profits, or dividends. The ordinary trust is not a legal entity whereas the business trust is. See 76 AM. JUR. 2D Trusts which lays out the law of the ordinary trust.

(6) Black’s Law Definition of Declaration of Trust: the “act by which the person who holds the legal title to property or an estate acknowledges and declares that he holds the same in trust to the use of another person of for certain specified purposes. The name is also used to designate the deed of [I’m sure they meant “or”] other writing embodying such a declaration.”

What is so ironical about the ELC attacks against the ordinary trust and the DOT is that the ELC has declared their own trust in writing; they have made a written “Declaration of Trust.” If you doubt this, please go to pages 149-150 of Approved by God: A Case for Modern Disestablishment (Mesick, Michigan: Adorn Books 2004), an ELC book. Pages from that book are quoted below. Compare their words with the words from the definitions they rely on to attack the ordinary trust. It is apparent that they are declaring some type of trust.

As is explained in Analysis of “The Questions will keep coming, the last section of Chapter 18 of Approved by Man:

According to the declarations of the ELC, they recommend a type of trust (maybe a business trust) by which “property should be held by the church in trust for the Lord Jesus Christ, who is the true and beneficial owner.” (See, Robin Wright and Ben Townsend, Approved by God: A Case for Modern Disestablishment (Mesick, Michigan: Adorn Books 2004), p. 149.). The ELC states that for property be held to reflect the ownership of Christ over His church “the property should be held by the church in trust for the Lord Jesus Christ, who is the true and beneficial owner.” (Approved by God, p. 149).

The ELC states that property may be held in three ways: “(1) as a corporation, (2) as an unincorporated association and:

“(3) as an individual. How can property be held to reflect the ownership of Christ over His church? It must be held as an individual, and that individual must be the Lord Jesus Christ! The property should be held by the church in trust for the Lord Jesus Christ, who is the true and beneficial owner. In spite of the skepticism of many, churches in 22 states have placed their property in the name of the Lord Jesus Christ without incident.” Approved by God, p. 149. The book goes on to say that “the church, by the Pastor, can execute a deed on behalf of the Lord Jesus Christ.” Ibid., p. 150.

The last paragraph of the section which is the focus of this article, “Why such a strong stand against the Declaration of Trust? states: “So, every resource cited has explained that the Declaration of Trust is a Trust document. And placing church property in a Trust is no different from placing it into a corporation.” The last sentence is another totally ridiculous statement on two accounts. First, the ELC unknowingly condemns their own method, and correctly so. Their statement may be correct as applied to the trust they recommend since it is irrefutable that the trust they recommend must be based upon the law of some type trust – such as business trust or charitable trust – since all their understanding of trusts is taken from trusts which are legal entities. Apparently they have never examined the law of ordinary trust, or, if they have, they have ignored it because it defeats their attack against the ordinary trust. Second, corporations and some kinds of trusts are legal entities. A business trust is a legal entity and has other similarities to a corporation. On the other hand, the ordinary (Bible) trust which I recommend is not a legal entity and is totally different from a corporation. This is explained in detail in Separation of Church and State: God’s Churches – Spiritual or Legal Entities?

Thank you, ELC, for waking up our brain cells.
Thank you, ELC, for waking up our brain cells.

The ELC and those who depend thereon need to study these matters. Since pastors have a full time job, they need the assistance of those with legal as well as Bible knowledge. A correctly worded and implemented Declaration of Trust which makes clear that from henceforth, a church abandons the ELC declaration as well as other measures will assure them that they are accomplishing their goal or glorifying God. The trust which they establish creates a legal entity. They should adopt a DOT which establishes an ordinary trust. For many other reasons other than those already indicated in these articles, that would be by far their best course of action.

“The Endnote below links to the entirety of Section VI, Chapter 7 of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application; that chapter explains the Declaration of Trust and the ordinary trust, and compares incorporation with the ordinary trust.

Endnote

The following links to the entirety of Section VI, Chapter 7 of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application; that chapter explains the Declaration of Trust and the ordinary trust, and compares incorporation with the ordinary trust:

Click here to go directly to the online version of Section VI, Chapter 7 of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application.

Chapter 1: Analysis of the title to and first two paragraphs of Chapter 18 of “Approved by Man”

CoverApprovedByMan

Related articles:

Chapter 1: Analysis of the title to and first two paragraphs of Chapter 18 of “Approved by Man”

Thank you, ELC, for waking up our brain cells.
Thank you, ELC, for waking up our brain cells.

Jerald Finney
Copyright © November 6, 2014

The ELC article, Chapter 18 of Betrayed by Man, begins with two paragraphs. Thereafter, it is divided into titled sections. This chapter will analyze the title and then the first two paragraphs.

The reader should especially notice that this chapter reveals that the ELC method of church organization has, by published ELC admission and according to ELC criteria for what gets a church into trouble, gotten ELC churches into trouble. The ELC method gets churches into the legal system, whereas the BLC method they attack does not.

Approved by Man: A Case for Biblical Reasonableness” by John R. Wright and Benjamin E. Townsend, leaders of the Ecclesiastical Law Center (“ELC”)), was published in 2009. Concerning the ordinary trust and the DOT, only the teachings of the Biblical Law Center (“BLC”) and this Old Paths Baptist Church “Separation of Church and State Law” ministry or those of the ELC are correct – the teachings are mutually exclusive. The ELC has publicly made this an issue. The ELC has also publicly attacked people who promote the ordinary trust including pastors, churches, and the Biblical Law Center. This booklet corrects the false ELC teachings concerning the ordinary trust and Declaration of trust; and also exposes the ill advised recommendations for church organization by the ELC for what they are.

This chapter analyzes the title to and first two paragraphs of Chapter 18, “Should a Church Be Placed In a Declaration of Trust?” which is also on the home page of the ELC website (ELC website: http://lordshipchurches.info/). Chapter 18 is analyzed paragraph by paragraph and section by section.

Analysis of the title to the chapter

173FlashABManThe title to Chapter 18 – “Should a Church Be Placed In a Declaration of Trust?” – should alert anyone with any knowledge of the subject that the author of the chapter may not understand the ordinary trust and the Declaration of trust. One cannot “place a church in a Declaration of Trust.” A Declaration of Trust (“DOT”) is merely a document which creates an ordinary trust, a relationship whereby a trustee is to hold property for the benefit of the true or equitable owner of the property. The DOT is one manner in which one may set up an ordinary trust which is not a legal entity (or some other type of trust such as a Business Trust or Charitable Trust, both of which are legal entities). One may establish an ordinary trust with or without a DOT. In fact, when a church – as does an ELC church – entrusts tithes, offerings, gifts and/or property to a pastor or other person(s) for the benefit of the true owner, the Lord Jesus Christ, that church has established a trust with the pastor as a trustee; for a church to so establish a trust relationship without a DOT is unwise. For example, when an ELC church holds property in the name of the Lord Jesus Christ, the church, by the pastor, acts as a legal entity by signing the deed; that pastor is the trustee of a trust. This will be explained in detail in this series of articles. The better practice is to declare an ordinary, non-legal entity trust through a properly executed DOT.

The ordinary trust is described in Volume 76 of the legal encyclopedia AMERICAN JURISPRUDENCE 2d. “Is the ordinary trust a legal entity?” explains why this ordinary trust is not a legal entity; this question is important because the ELC insisted for years that the ordinary trust utilized by BLC churches and the Old Paths Baptist Church Separation of Church and State Law Ministry (SCSLM) was a legal entity. Only after the first 8 chapters of this booklet were published online did Ben Townsend, against public revelation of solid fact which cannot be refuted, relent and admit that the ordinary trust is not a legal entity. Chapter 13 of this booklet addresses an article written by Ben Townsend after the first 8 chapters of this booklet was published in which he finally admitted that the “trust” is not a legal entity.” Read chapter 13 to find Townsend’s ridiculous slant after that admission and this author’s response: this author actually countered Townsend’s slant in 2008 as chapter 13 reveals.

Other articles in this series fully explain the ordinary trust which is also explained in Section VI, Chapter 7 of God Betrayed/Separation of Church and State: The Biblical Principles and the American Application which is available free in online and PDF form. See Order Information for Books by Jerald Finney should you desire to get a softback copy. One of the many flaws in the legal research and analyses of the ELC is that they indiscriminately grab out of context statements from court cases, legal encyclopedias, etc. and just make up fictitious and incorrect law to attack the ordinary trust and DOT. As will be seen as Chapter 18 of Townsend’s book is analyzed in this and subsequent chapters, the ELC, for example, uses the law of business trusts and incorrectly applies it to the ordinary trust.

Analysis of the first paragraph

174FlashABManThe article begins by saying, “We believe it [the DOT] will get churches into trouble.” Ben Townsend, an ELC leader, has gone so far as to mount a dishonest online attack against a church which places tithes, offerings, gifts and property in a trust whereby the trustee of that trust has a fiduciary duty to use the monies and properties for the benefit of the true owner of the property. The DOT has never gotten any church into trouble, although Ben Townsend has lied and stated that it has. ELC churches have to, as Wright/Townsend state in Chapter 3, page 35 of Approved by Man, “handle legal church problems.” In that chapter, Townsend not only reveals that ELC churches must go to court but also falsely leads one to believe that he can represent churches in court. He is not an attorney and he cannot represent anyone or any entity in court because he is not a lawyer. Furthermore, he is not qualified to do so; nor is he qualified, as is obvious from the analysis of Chapter 18, to do legal research, especially, as he puts it, “intense legal research.”

In Chapter 3 of Approved by Man, Townsend speaks of lawsuits involving ELC churches, tax on property of an unincorporated church, and inspections of the “church’s building.” Using Townsend’s reasoning, the ELC method admitedly gets churches into trouble all the time. Unlike the ELC churches referred to in Chapter 8, a church which places tithes, offerings, and gifts into an ordinary trust as recommended by the BLC and the SCSLM is not a legal entity which cannot be taken into court or agency process; the DOT and the ordinary trusts thereby created have kept BLC churches out of legal problems and legal actions. Chapter 3 makes clear that an ELC churches own property, can and have been taken to court, and are therefore legal entities. Because churches in general enjoy favorable public sentiment and have protections which no other institution or entity has, there has not been an in depth and dedicated study of ELC methods by government lawyers and ELC churches have not been called for what they are – legal entities who have given up much of their biblical and First Amendment protections. One should note that governments still allow sales and property tax exemptions for all churches whether legal entities or not. When a local tax board challenges a “religious use” tax exemption on property on which a local church meets, the ELC church must go through the agency process (and appeal to court, if necessary); but in a property tax challenge against trust property utilized by a BLC or SCSLM church, the church cannot be brought into the process – rather, the pastor/trustee of the trust represents the trust in obtaining the property tax exemption. To this point, no property utilized by a BLC or SCSLM trust has been denied the exemption.

The third sentence to the paragraph then states: “Pastors, Deacons, and other Christians must realize the background of this document in law, and refuse to allow the church and church property to be placed into such a document.” This sentence is totally wrong. What is important for believers to know about the ordinary trust are the biblical principles regarding trust and what the ordinary trust and the document establishing it are. See Spurious rationale for incorporating: to hold property for a biblical and legal analysis of the ordinary trust.  Contrary to the ELC assertions, believers do not place any money or property in the document, the DOT. The DOT merely declares the trust. If a church is organized according to biblical principles, there is no church property. Rather, the members of the church (who are the church) give tithes, offerings, and gifts to God and those monies/properties make up the trust estate. The true owner, as declared in the DOT, is the Lord Jesus Christ. The person who is to administer the monies/properties is the trustee (the legal owner – the person who signs deeds, vehicle titles (if any), etc. as trustee. This is necessary since the Lord is not now physically present on earth and has therefore left believers with the fiduciary duty to handle His property and monies for His benefit (for the Glory of God). The trustee has a fiduciary duty to manage the monies/properties for the benefit of the true owner.

The last sentence of the first paragraph in Chapter 18 of Townsend’s article states: “More than that, a pastor must not allow himself to sign a document referring to himself as the ‘Trustee’ which represents the church.”

From page 149 of ELC book
From page 149 of ELC book “Approved by God”

First, that sentence is ludicrous when delivered by Townsend because pastors of Townsend’s ELC churches are trustees who represent the church. On pages 149 and 150 of the ELC book Approved by God are the following statements: “The property [of an ELC church should be held in trust for the Lord Jesus Christ, who is the true and beneficial owner (p. 149); and “Actually, the church, by the Pastor, can execute a deed on behalf of the Lord Jesus Christ, so that isn’t a viable difficulty (p. 150). These statements make clear that the church is set up to be a legal entity because the church is the legal owner of the property and the true and beneficial owner is the Lord Jesus Christ.

From page 150 of
From page 150 of “Approved by God”

On the other hand, the last sentence of the first paragraph of Townsend’s article above is wrong on two accounts as applied to the ordinary trust: (1) it is wise for a pastor/trustee of an ordinary trust to hold money and property for the benefit of the true owner, the Lord Jesus Christ; (2) the pastor/trustee is the legal owner of the property and the Lord Jesus Christ is the true and beneficial owner:

“The trustee of an ordinary trust is the person appointed to execute a trust, and the one in whom an estate, interest, or power is vested, under an express or implied agreement to administer or exercise it for the benefit of another. In other words, a trustee is a person who holds legal title to property under an express or implied agreement to apply it, and the income arising from it, to the benefit of another.” [Bold emphasis mine.]

In other words, the trustee of the ordinary (Bible) trust has a fiduciary duty to administer or exercise the property for the benefit of the true or equitable owner of the property, the Lord Jesus Christ. This is something entirely different from “representing the church.” A pastor/trustee who holds tithes, offerings, gifts, and property in the name of (for the benefit of) the Lord Jesus Christ has this fiduciary duty in the trust relationship established by a Declaration of Trust.

On the other hand, as Townsend admits in his writings, the pastor of an ELC church acts as the trustee of “church property” even though such declaration is not in a DOT (See, e.g. pp. 149-150 of the ELC book Approved by God which are photographed and inserted above.). ELC publications demonstrate that the ELC methodology clearly establishes a type of trust which is a legal entity, relegates ELC churches to legal entity status, makes the pastor of the ELC church trustee of “church property” thereby representing the church. One could admonish Townsend as follows: “The results of the first microscopic examination of ELC methodology now published in this booklet clearly prove:

“Legally and biblically, the ELC, under your leadership, puts pastors in the position of trustees who represent ELC churches – the very thing you wrongly accuse the BLC of doing through the use of the DOT and the ordinary trust thereby created. Because of this and other flaws pointed out in this booklet, the ELC needs a Bible believing, born-again lawyer who is motivated by the love of God, not money, to help you straighten out the mess established by the ELC.”

Both the BLC and the SCSLM utilize the impeccable method which was conceived by Attorney Al Cunningham who obviously put the system under a legal and biblical microscope before implementation. The BLC and now the ELC method have both been put under a legal microscope by another attorney, Jerald Finney. Finney published his conclusions concerning the BLC methodology a long time before taking on the task of microscopic examination of the ELC attacks against the BLC and the ordinary trust recommended by the BLC.  He found that the law and the Bible prove that Al Cunningham’s ordinary trust arrangement is on solid biblical grounds and keeps a church out of the legal system. To have lied about his conclusions and the law would have dishonored the Lord. Had Finney concluded that the BLC methods were flawed, he would have informed the BLC, just as he is now informing the ELC that they have created a mess.

Microscopic examination by two lawyers has proved the BLC method to be flawless. Microscopic examination by one lawyer has proven the ELC method to be flawed both biblically and legally. The biblical and legal reasoning supporting the conclusions concerning the problems with the ELC way of doing things are clearly stated in this booklet. ELC responses to the arguments in this booklet have been facetious at best.

Understanding that the ordinary trust is not the  church and the church is not the ordinary trust is important. The church does not own the money/property held in the trust (the trust estate). Church members give to God and what they give is held in the trust estate. Money/property has to be held somewhere, by someone. In this case the trust estate holds the money/property which is owned by the equitable owner, the beneficiary. The trustee has legal title to the money/property, but he is to use it for the benefit of the true and equitable owner, the Lord Jesus Christ. Again, this is in contrast to the unbiblical method used by the ELC by which tithes and offerings are given to the church, not to God, and “church property” is held by the church through a pastor/trustee.

Analysis of the second paragraph

The ELC then alleges that the attorney who “came up with this document” (the DOT) “could only think of a legal remedy for church problems, and not a Biblical remedy.” No one should  speculate as to the thought processes of that attorney who is now deceased. What is important is the applicability of the method from a biblical perspective. As has already been shown in this chapter, the remedy of the ELC is legal, not biblical and only the unqualified could have come up with such totally chaotic methodology. They have gotten away with their nonsense because no one, until this time, has examined some of their teachings with a “legal microscope.” One can imagine what examination of all their teachings by a qualified legal analyst would reveal.

A biblical and legal analyses of the issues can be found in God Betrayed (see the link above above). The facts, citations, and reasoning supporting the conclusion that the ordinary trust is ideal for an American church are in the writings and teachings on this “Separation of Church and State Law” website. Section VI, Chapter 7 of God Betrayed explains the ordinary trust and the DOT. The first three sections of God Betrayed lay out the biblical doctrines of government, church and separation of church and state; and Section VI, Chapter 7 looks at both biblical and legal precepts concerning the ordinary (Bible) trust and compares the ordinary trust to incorporation (2 entirely different things) and shows why the ordinary trust is biblical.

The ELC then states, “We believe that this attorney used an existing legal document and applied it to unincorporated churches so that they could hold property without coming under the jurisdiction of the state.” Wrong. The attorney took the concepts of ordinary trust and drafted a Declaration of Trust which declared an ordinary trust. The church who places tithes, offerings, and gifts into the estate of such a trust does not hold property. The trust estate holds the property. The true, beneficial, and equitable owner of the property is the Lord Jesus Christ. Placing God’s money and property in an ordinary trust keeps a church under the Lord Jesus Christ only and out from under civil government jurisdiction if the church is careful not to place herself under state jurisdiction in some other way. One should keep in mind that a church who holds property, opens a bank account, takes out insurance, or does some other legal act forfeits her New Testament and First Amendment status.

The purpose of the ordinary trust is to assure that there is no church property and that all properties and monies in the trust estate are administered by the trustee for the benefit of the true owner of the property (the Lord Jesus Christ). A properly worded “Resolution to Adopt a DOT” and a properly worded DOT makes clear that the trust estate is owned by the Lord and that there is no church property.

A court/agency will assume jurisdiction over a controversy concerning money or property only if the dispute is properly brought to attention of the court/agency with jurisdiction over the matter. If a proper action is properly brought to the attention of an appropriate court or agency, the court or agency will assume jurisdiction no matter how the property/money is held and no matter who owns the property/money. In such an action, the court will seek out the legal owner and if none is found, the court or agency will take the necessary steps to get the property/money to a legal owner. Should a church hold/money property, that church is the legal owner and the church is a legal entity; this is the case of an ELC church, but not so with a BLC or SCSLM church. When money/property is put into the trust estate of an ordinary trust, the trustee is the legal owner and the Lord Jesus Christ is the equitable owner. A court cannot bring a church into such a legal controversy if that church places tithes, offerings, and gifts into a trust administered by a trustee where the beneficiary is the Lord Jesus Christ (as long as the church does nothing that makes that church a legal entity).

The elements of the ordinary trust and the DOT recommended by attorney Al Cunningham not only comply with Bible principles, but also incorporate the elements of a DOT and “trust” explained in American lawbooks such as 76 AM. JUR. 2D, Trusts and the DOT guidelines in the accompanying forms volume. “Declaration” means: “Publication, manifestation; as the declaration of the greatness of Mordecai. Esth. X.; A public annunciation; proclamation; as the Declaration of Independence, July 4, 1776” (MERRIAM WEBSTER’S AMERICAN DICTIONARY OR THE ENGLISH LANGUAGE (1828) definition of “DECLARATION.”). Declaration of Trust is defined as follows:

“The act by  which the person who holds the legal title to property or an estate acknowledges and declares that he holds the same in trust to the use of another person or for certain specified purposes. The name is also used to designate the deed or other writing embodying such a declaration” (BLACK’S LAW DICTIONARY 408 (6th ed. 1990) under definition of “Declaration.” This definition is consistent with the definitions in more authoritative legal references such as AM. JUR. 2D and C.J.S.).

76 AM. JUR. 2D Trusts § 65
76 AM. JUR. 2D Trusts § 65

The words in the DOT which Cunningham used are unique and are not found in any lawbook. As to the use of express or particular words or phrases to create a trust:

  • “No particular words are necessary to create a trust if there exists reasonable certainty as to the intended property, object, and beneficiary. Further, the purpose and intention, rather than the use of any particular term, determines whether a valid trust has been established. An express trust may be created without the use of technical words. All that is necessary are words or circumstances which unequivocally show an intention that the legal estate is vested in one person, to be held in some manner or for some purpose on behalf of another.
  • “Any statement that shows the ownership or control of property is vested in one person for the benefit of another is sufficient to create a trust, and it is not necessary that the words ‘trust’ or ‘trustee’ be used. Furthermore, even where present, the mere use of the words ‘in trust’ by the parties is not sufficient alone to create a trust, nor does the mere designation of a party as ‘trustee’ create a trust. Absent indications to the contrary, a conveyance using the words ‘for the use of’ or ‘for the benefit of’ demonstrates the intent to create a trust.” (76 AM. JUR. 2D Trusts § 65 (2007)).

As will be shown below, the a church which utilizes the ELC method creates a trust which is a legal entity (perhaps a charitable trust or business trust). The trust which is recommended by the “Separation of Church and State Law” ministry is not a legal entity as explained in the article Is the ordinary trust a legal entity?

Thus, the holding of property by a person (trustee) “in the name of the Lord Jesus Christ,” creates a trust. This is a very important for ELC churches to understand since the ELC recommends that property be held by the church (pastor) in trust for the Lord Jesus Christ, the true and beneficial owner and that the church can hold property (e.g., execute a deed) by the pastor, in trust for the Lord Jesus Christ. (See their exact wording below.) The legal system requires a legal tie to real estate as expressed in a deed. If no such tie to real estate exists, and this fact is brought to the attention of the proper court, the court will make sure that a legal entity, such as a person, assumes ownership of the property. Should a controversy arise as to ownership of the real estate, the legal system when properly petitioned will take jurisdiction over the matter. When real property is put up for sale, the buyer is going to want legal assurances that he is getting valid, enforceable legal and equitable ownership.

76 AM. JUR. 2D Trusts § 65 continued
76 AM. JUR. 2D Trusts § 65 continued

The ELC states that property may be held in three ways “(1) as a corporation, (2) as an unincorporated association and:

“(3) as an individual. How can property be held to reflect the ownership of Christ over His church? It must be held as an individual, and that individual must be the Lord Jesus Christ! The property should be held by the church in trust for the Lord Jesus Christ, who is the true and beneficial owner. In spite of the skepticism of many, churches in 22 states have placed their property in the name of the Lord Jesus Christ without incident” (Approved by God: A Case for Modern Disetablishment, by Wright/Townsend, page 149). The book goes on to say that “the church, by the Pastor, can execute a deed on behalf of the Lord Jesus Christ.” Ibid., 150.

From ELC book
From ELC book “Approved by God,” p. 149

The ELC are confused since they first say that the property must be held by the Lord Jesus Christ and then they say that the property should be held by the church in trust for the Lord Jesus Christ. Of course, property cannot be held by the Lord Jesus Christ since he left all earthly temporal property to be held in trust by man and has given civil government the ultimate jurisdiction over that land. If a nation honors God and His precepts, that nation will also honor God’s churches, and vice versa. If a believer or church is found out in North Korea (and many other nations), any properties which the believer owns will be confiscated and the believers will probably be executed. God allows individuals, families, churches, and nations free will to honor or dishonor him, for the time being.  The ELC, in the above statement, also says that the church, is to hold the property.

From ELC book,
From ELC book, “Approved by God,” p. 150

The ELC states the elements of a trust, and then make clear that the trust they recommend is a legal entity through which the church holds property thereby making the church the legal owner of the property. Some of the words of the ELC quoted above is taken straight out of legal books which define the ordinary trust, but other words compromise the trust and establish it as a lega entity. They then say, “Held by the church in trust for the Lord Jesus Christ.” (Bold emphasis mine). For a church to hold property violates biblical principle. (See The Biblical Doctrine of the Church and The Biblical Doctrine of Separation of Church and State). Not only that, only a legal entity can hold property. There must be a legal owner of property, even if the legal and true and beneficial owner are not the same. They do not realize that they are in effect stating that the church is a legal entity.

The above illustrates that the ELC recommends compromising the position of a church who uses their method. They state that the church is to “hold the property in trust for the Lord Jesus Christ, who is the true and beneficial owner.” By so stating, they make clear that the church is the trustee of the property which is held in a legal entity type of trust; this argument is strengthened by the fact that, in their attacks against the ordinary trust they incorrectly rely on the law of business trusts as will be shown below. To repeat:

“The ELC teaches that the trust is a legal entity. They are partially correct in that some types of trusts are legal entities. However, the ELC does not quote from the law concerning ordinary trusts as to the legal entity status of the ordinary trust (see above). They do this to establish their incorrect position that the trust utilized by the BLC and this ministry are legal entities. They quote from the law concerning, for example, business trusts. See pages 175-177 of Approved by Man: A Case for Biblical Reasonableness by Wright/Townsend, for an example of where they quote from the law of business trusts and apply it to the ordinary trust. In American Jurisprudence, the law of business trusts is covered in volume 13 whereas the law concerning ordinary trusts is covered in volume 76. The two types of trusts are very distinct types of trusts.”

Thus, the ELC, in their zeal to discredit the ordinary trust, have in fact discredited their own methodology; they create a type of  trust which is a legal entity which can act legally, sue, be sued, go into debt if so desired , and enter into contracts (the ELC teaches against a church going into debt and entering into contracts.). Since they declare that the church is to hold the property for the true owner, they are declaring that the church is the trustee and, therefore the church has to be a legal entity. Only a legal entity can hold property; a spiritual entity cannot hold property. The trustee of a trust holds legal title and the beneficiary holds true or equitable title to property.

The ELC then states that “the church, by the pastor, can execute a deed on behalf of the Lord Jesus Christ.” Suffice it here to say that the ELC claims that the church can execute a deed. Only a legal entity can execute a deed. At the same time, they state that the church executes the deed by the pastor. Thus, the pastor effectively serves as trustee, but trustee of what kind of trust? Not a non-legal entity ordinary trust which is something they do not understand and therefore attack. He serves as trustee of a legal entity and that legal entity is the church he signs for.

Public sentiment and the lack of legal action against churches protects churches from legal scrutiny. For the foreseeable future, ELC churches do not have to worry about attacks. There are many situations, even outside the church-state context, where the legal system has not been alerted to some improprieties and therefore has not taken action. Consider the actual situation in which the owner of property has been dead for years and the man living on the property has paid the taxes for years. As long as he keeps up on the taxes and no one takes the issue to court, the man will be able to enjoy the property. Should an ELC church ever be in the legal sights of government lawyers, the ELC has subjected churches who use its methods to a compromised position and sharp government lawyers may pierce their armor. More importantly, the ELC, by not proceeding according to knowledge, wisdom, and understanding, has unknowingly dishonored the Lord.

As a sidenote, it is incorrect to say that property may be held as an individual, corporation, or unincorporated association. The correct way of putting it is that property may be held by or in the name of an individual, corporation, or association.

Finally, the last sentence in the paragraph says, “Since his passing, the Declaration of Trust has evolved into a magic talisman of mystic proportions, designed to fill all the needs of a local church.” That sentence is patently absurd. The author, the pastors, and the believers the author knows and who place tithes, offerings, and gifts into an ordinary trust established by a Declaration of Trust do not believe in magic. Those who put their tithes and offerings in an ordinary trust estate for the benefit of the true owner of all properties, the Lord Jesus Christ, know that the trust established by the DOT is only one piece of the puzzle. There are many ways in which a church can compromise the headship of the Lord Jesus Christ over a church. And even though they believe that the Lord Jesus Christ is the only one who can fulfill all their needs, their focus is not on themselves and their needs but on obedience to His statutes and precepts. More importantly, they believe that all they do should be for the Glory of God.