Category: Bequests and Legacies

ESTATE BEQUESTS TO CHURCHES

Generally, a bequest to a church or denomination in a will does not create controversy. The will is usually clear, the estate administrator follows clear instructions in the will, and other beneficiaries act reasonably. However, sometimes life events outpace both the elderly person and the will left behind to identify the recipients of their final gifts.

In Estate of Stumm, Slip Op. (NJ App. 2019), the will was written in the last decade but before the testator died the local church dissolved which was the object of a bequest. The denomination made a claim to the bequest as successor of the local church. The administrator of the Estate, however, sought court interpretation of the will. The administrator also argued the testator’s intent was that the successor of the local church would be the local church that took over the dissolved churches’ ministry, members and mission. Further, the administrator and other witnesses testified the testator held the denomination in disdain and would never have intended for the denomination to be the successor. The trial court held that because the local church named in the will dissolved before the testator died, neither the dissolved local church nor the successor denomination could inherit the bequest. The appellate court affirmed and held the dissolved local church ceased to exist before the bequest became a vested right or property. Therefore, the denomination had nothing to which to succeed. Also, another local church took over the ministry, members and mission of the dissolved church. Indeed, that church ministered to the testator as an elderly shut in and then officiated at her funeral.

Bequests placed in wills for churches should also name a successor. Assuming the church named in the bequest will exist at the time of death is no longer a safe assumption, if it ever was. People sometimes outlive them. Many denominations operate trust funds committed to local church needs and such a trust or foundation may be a natural successor to select if the denomination is not the preferred successor.

DONATIVE INTENT DEFENSES

The question of whether donative intent is binding often arises in local church leadership discussions. However, donative intent rarely is a factor in church litigation because it is rarely placed at issue by the donor.

In Holy Trinity Romanian Orthodox Monastery v Romanian Orthodox Episcopate, Slip Op. (Mich. App. 2019), the trial court decided based on donative intent that the attempt to transfer the property away from the hierarchical denomination was successful. The Court of Appeals reversed. The court of appeals held that the because the warranty deed gifting the property to the denomination did not preserve the donative intent to provide a life estate to the Plaintiff the donative intent was not relevant. (The trial court also failed to consider the impact of the Ecclesiastical Abstention Doctrine, probably because of the donative intent issue, and was reversed on that as well. Hierarchical denominations retain their church governance sovereignty.)

Donative intent is not preserved simply because the donor tells a church leadership of the intent. Once the gift is made, the donative intent is irrelevant if not preserved in a manner that restricts the ownership or disposition of the ownership of the gift. While among church leaders there are often many urban legends about the binding effect of donative intent, the truth is that it is usually no more binding than the church leadership’s voluntary decision to do so. Fungible gifts like cash lose any connection to the donative intent as soon as the cash is deposited in a church bank account.

CHURCH BEQUESTS LITIGATION

 

Typically, bequests to churches do not engender much controversy because the bequest is usually modest in comparison to the estate or the estate has no other beneficiaries.  Nevertheless, many churches ask their members to leave a bequest but do not find out until after death whether the bequest has been documented in an enforceable manner.

 

 In Birchman Baptist Church v Elliot, Slip Op. (Tex. Civ. App. 2018), the deceased was required by his divorce decree to keep his life insurance policy in force and to nominate his children as the beneficiaries.  The divorce decree did not require the beneficiary designation to remain inviolate after the children became adults.  The deceased complied and after several years the children matured into adults.  Inexplicably, the deceased used the fax machine at the church to submit an amended beneficiary designation which eliminated his children as beneficiaries and nominated the church.  Shortly thereafter, the deceased sent a suicide note to the church pastor and then committed suicide.  The appellate court reversed the trial court and held that because the divorce decree did not require that the children remain the beneficiaries beyond reaching majority status, the substitution of the church as beneficiary was enforceable.  However, because the children alleged undue influence by the church in causing the deceased to eliminate them as beneficiaries, the case was remanded to the trial court for a decision on that issue.

Such a tragedy does not yield many usable lessons.  The church would never condone the suicide, and, indeed, would have tried to prevent it.  The children may have been temporarily estranged, or may not have been, but had their father lived there might have been an opportunity to reduce or heal the rift.  Thus, the children would not have sought the death.  Given what the parties appear to have spent on legal fees and the modest size of the policy, an amicable sharing agreement would have been more cost effective.