At Ask The UMC, we continue to answer questions from congregations wondering about the future of The United Methodist Church, whether they should consider disaffiliating from it, and what happens if they do. Some of these questions reflect widespread misperceptions or misinformation that some congregations are receiving as they discern their next steps.
This is the sixth of a series of articles offering accurate and objective responses to such misperceptions or misinformation. All articles in the series are based on a variety of questions we have received multiple times through email, phone calls and live chat. See a listing of all of the articles in the series here.
We welcome your questions and invite you to contribute to future articles in this series by sharing what you are hearing about the process of disaffiliation or the future of The United Methodist Church. Write to AskTheUMC@umc.org.
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21. Letting churches in multi-point charges retain their property, including parsonages, if the local church that actually owns the parsonage disaffiliates?
Yes.
Local churches in The United Methodist Church own their property while also holding it in trust for the annual conference. Charges are not legal entities, and so do not hold title to property as such. Local churches do.
When a local church disaffiliates under ¶2553, it takes with it all of its property, including any parsonages to which it holds title. While it is possible for it to choose for whatever reason not to do so, nothing compels a church owning such property to release it as part of its disaffiliation. This is true even if it is part of a multi-church charge in which the parsonage of the disaffiliating church provides housing for the clergy appointed to all of the churches in the charge.
So what is a charge to do if the church that owns the parsonage for its clergy departs, taking that parsonage? This is a matter for the district superintendent to resolve under the superintendent's duty to establish and re-align charges (¶419.9 of the 2016 Book of Discipline). The remaining church or churches in the charge do not need to resolve this themselves. The district superintendent can create a new multi-point charge that is able to provide for the housing of the appointed clergy.
22. Telling local churches considering disaffiliation not to seek legal counsel?
No.
Competent legal counsel may be very helpful throughout the disaffiliation process. Every annual conference supports and encourages congregations to seek legal counsel when it may be helpful to understand the legal implications of disaffiliation and to make a smooth transition if the church disaffiliates.
Local churches considering disaffiliation should seek legal counsel if they have endowments, trusts or donor-directed funds they manage themselves or that are under management by others (such as foundations, see below). While the disaffiliation process described in the Book of Discipline may enable disaffiliating local churches to retain their assets, law governing the management of endowments, trusts and donor-directed funds may not. It depends on the legal language that created the endowment, trust or donor-directed funds in question. Legal counsel can provide important insight to local churches about whether or how they may retain or benefit from such funds should they disaffiliate.
Disaffiliating churches may also find legal counsel helpful in creating and filing new incorporation paperwork, obtaining new 501(c)3 letters, and revising their deeds once they are approved for disaffiliation.
Annual conferences do discourage seeking adversarial legal counsel who may offer to file lawsuits against the annual conference or claim they may have workarounds to the disaffiliation processes laid out by the Discipline and conference policies to enact them. There is little merit to such claims, and courts have almost always sided with United Methodist annual conferences in such cases. Conference advice against pursuing such counsel is to protect the interest not only of the conference, but also of disaffiliating local churches that may only experience net financial losses through associating themselves with such counsel.
23. Prohibiting disaffiliating local churches and United Methodist individuals from retaining assets in United Methodist foundations and credit unions?
No.
The United Methodist Church has no legal means to make any such prohibitions.
United Methodist-related foundations and credit unions are independently incorporated non-profit entities. They are governed by their own rules and membership agreements, as well as by their articles of incorporation and how corporation law works where they are incorporated.
These matters work a bit differently for foundations as opposed to credit unions. Let's take each in turn.
United Methodist-related foundations
How relationships may continue between a United Methodist-related foundation and a given individual or church that has disaffiliated from The United Methodist Church can vary. Three major factors influence what these relationships may be.
One is the articles of incorporation of the foundation. A foundation may be bound by its articles of incorporation to serve only United Methodist-related entities with some or all of their services. Generally, there may be limitations on financial services, such as investment management, they may continue to offer to non-United Methodist entities. At the same time, again, depending on their articles of incorporation, they may be able to offer other kinds of services, such as education about charitable giving, to anyone. Because each foundation has its own articles of incorporation, churches considering disaffiliation and that use a United Methodist related foundation will want to contact their foundation to find out what services the church may continue to expect should it disaffiliate so the church may plan accordingly.
A second factor is law governing endowments, trusts or other donor-directed funds a foundation may manage. If those endowments or trusts have clauses that revert the assets under management to the foundation itself or the United Methodist annual conference should the congregation cease to remain United Methodist or that state the assets and/or its proceeds are to be used solely for the benefit of The United Methodist Church, the foundation is required under law to honor those directives. It cannot permit these assets to return to the control of a local church that disaffiliates from The United Methodist Church. Similarly, if the local church is legally closed as a corporation as part of the disaffiliation agreement (as occurs in some conferences), any endowments, trusts or other donor-restricted funds under management may not legally be transferable to the control of the disaffiliated church. The same applies for any endowments, trusts or donor-restricted funds directly under the management of the local church as noted above (see question 22).
What does this mean for disaffiliating local churches? First, it means the existing relationship with a United Methodist foundation may change should the local church disaffiliate. The church will want to ask its trustees to contact the foundation and obtain a written response about the implications of disaffiliation. And second, it means the local church cannot assume it will be legally able to retain some or all of these assets either under the management of others or by the disaffiliated congregation itself. It depends on the legal language creating the endowment or trust or the donor restrictions attached to the funds under management. It also depends on what the disaffiliation agreement with the conference requires. To address these matters, the church may want to seek competent legal counsel.
Under federal law, persons who have become part of a credit union because they met its membership requirements at one time cannot be removed from membership in that credit union because they may no longer meet those criteria at a later time. So, if you joined a United Methodist-related credit union created to serve members of The United Methodist Church, but later the church disaffiliated or you joined a church of another denomination, you may remain a full member of that credit union as long as you wish.
However, if you seek to join a United Methodist credit union as a new member after your congregation has disaffiliated, or if you yourself were otherwise no longer part of The United Methodist Church at the time of your application, you may or may not be eligible. To join a credit union, one must meet its qualifications for membership at the time of seeking to join it. Depending on the membership agreement of a given United Methodist-related credit union, someone who is not a member of a United Methodist church may or may not be considered as qualified to join it. Some credit unions may be able to consider such applicants on a case by case basis, but nothing may require them to grant membership. This will vary by credit union.
So those who are currently members of a United Methodist-related credit union may retain their membership permanently, regardless of whether their local church disaffiliates. However, for the sake of those who are not yet members of it, the local church will want to contact the credit union to learn whether or under what conditions members of the congregation may become members of the credit union at a point in time after the local church disaffiliates.
24. Ending scholarships for students who are members of local churches who disaffiliate, or who may disaffiliate themselves?
It depends on who sets the terms of the scholarships and how they choose to respond.
In all cases, students who are receiving United Methodist-related scholarships-- whether from an annual conference, a general agency, or a United Methodist-related college, university or seminary-- will want to contact the provider of the scholarship to learn how disaffiliation or otherwise leaving The United Methodist Church will impact eligibility to apply for or continue to receive the scholarship or scholarships in question.
In the case of Ministerial Education Funds, the Book of Discipline limits eligibility to certified candidates for ordained ministry in The United Methodist Church. If you are a certified candidate and the local church where you hold professing membership intends to disaffiliate, you will want to move your membership to a local United Methodist church that is not disaffiliating from The United Methodist Church. If you remain a member of a church that disaffiliates, your candidacy for ordination in The United Methodist Church ends as of the effective date of disaffiliation. This also means your eligibility to apply for or continue to receive Ministerial Education Funds to support your seminary education has ended.
This content was produced by Ask The UMC, a ministry of United Methodist Communications.
