How to Protect Your Church Property and Assets

By Raul Rivera

When I survey the direction of ministry today, I see a country that is being torn from within. Our legislative culture is becoming more and more hostile toward churches. 

Right now, some statistics indicate that 1,000 churches per month get sued. That is a stunning 12,000 churches per year. At our Ultimate Church Structure Conferences, we often ask pastors what they are doing to survive this onslaught and the look on their faces reveal that, while it is important to them, they are at a loss for how to strategically prepare.

Churches today must have a proper response if they are going to thrive in a land where government continues to impose restrictive regulations and laws that attack the disciplines of faith. 

I am going to show you how a holdings corporation can be part of that response for your church. First, let us look at what happened to the oldest church in Georgia. 

Oldest church in Georgia loses its property

Christ Church, the oldest Episcopal Church in Georgia (founded in 1733) took a stance against the national Episcopal Church when it elected its first openly homosexual bishop. 

The congregation decided to leave the national church and join the Anglican Church. In response, the national church filed suit in court for the 3 million dollar building and property the church has used since 1733. 

The Georgia Supreme Court ruled 6 to 1 in favor of the national church and forced the leaving congregation to give up 100% of its assets. (See Rector v. Bishop of the Episcopal Diocese of Ga., Inc., 290 Ga. 95, 718 S.E.2d 237 (2011))

While this case speaks to property rights of congregations that are part of denominations, it also helps us identify what the best structure is for ownership of the church's cash, vehicles, equipment, and real estate - a holdings corporation.

Part of starting a church is having a legal persecution strategy

Knowing what I know now, if I were to start a church today, I would work expeditiously and purposefully to protect all of my church's assets by tucking them into a holdings corporation. 

Jesus gave the disciples a stern directive when he directed the first-ever Christian outreach. After anointing them to heal the sick, cast out demons, and raise the dead, he also told them to be "wise as serpents and innocent as doves" because (as he mentions in the very next verse) they would suffer legal persecutions. 

The Church tends to get the part of being innocent as a dove right but never really knows how to be wise as serpents within the context of what Jesus told the disciples. 

Jesus sent out the 72 and expected them to use wisdom (Greek word for shrewdness) to manage the legal persecutions that they were going to face. I am afraid that this type of planning is not even on the radar of the Church today.

(Recommended reading: "Is Your Next Mission Field the Marketplace?") 

The #1 reason why churches ended up in court in 2016

There are many reasons why churches end up in court. However, in 2016, the #1 reason why churches ended up in court was due to property disputes. 

This may not seem like a big deal, but this is the first time since 2011 that the #1 reason why churches ended up in court was not due to sexual abuse of a minor. 

A major reason why your church should have a holdings corporation is because property dispute lawsuits usually revolve around ownership when splits occur or when other major decisions by leadership fall out of favor. 

When these things happen, I am reminded that to start a church and bring it to fruition, no one pays a bigger price than the founders. 

Just imagine if from early on, you always kept all of the church's assets in a holdings corporation. Property disputes would never be an issue and your dream will always remain protected.

To start a church and bring it to fruition, no one pays a bigger price than the founders.

How a holdings corporation works

A holdings corporation is a separate corporation created by the church with one single purpose of holding the church's assets. The corporation is formed under section 501(c)(2). 

The church is the parent organization because it is the sole member of the corporation. Here is where the power of the holdings corporation rests. 

The church does not own the holdings corporation, but rather it is its sole member and its membership can never be revoked, terminated, or suspended for any reason whatsoever. If the church ever gets sued, the holdings corporation cannot be sued because it is a separate organization. 

If the church ever loses a lawsuit, its assets are safe because it cannot lose what it does not own. All of its assets are tucked away in the holdings corporation. 

(Recommended reading: "The Do's and Don'ts of Counting Church Money")

Can the holdings corporation go rogue?

I often get asked the question, "If the church does not own the holdings corporation, what would happen if it went rogue; would the church lose its assets?" 

Of course, the answer is, "NO."  

However, that is if it is properly set up. Here at StartCHURCH, we encourage and set up holdings corporations in which the church is the irrevocable sole member. This gives benefit to the church in that it provides sole control over the holdings corporation. 

Who has your blindside? 

In my hundreds and even thousands of conversations with pastors all across America, the one thing I see is that every pastor has a blind side. What is worse is that the blind side gets bigger and bigger as the laws of our country become more and more hostile. 

Who is covering your blindside? 

This is what keeps me up working late many nights. I have dedicated my life to helping protect the lives and livelihoods of pastors and ministry leaders all around the U.S. 

Everyday we help guide pastors in establishing protective strategies for their churches and ministries in today's world. Check out the link below for more information on how you can start a holdings corporation for your church, or call us toll free at 877-494-4655 and speak with one of our knowledgable team members.

Handpicked articles for you:

• “How Your Church Can Better Serve Your Community”
• “Are You Sure Your Ordination is Legal?”
• “3 Positions Every Church Board Must Fill”

---