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

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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.