Protect the Pastor's Spouse!
By Raul Rivera
What if something happens to the pastor?
Not long ago, I had a conversation with a pastor on salary at a church. He explained how he had recently begun thinking about his wife who has been serving faithfully at the church with him for over 20 years, but without any salary. What began as a passing thought grew into a real concern: if something ever happened to him what would become of his spouse? From the day they married till now she had never needed to seek employment. Though he knew they were both dearly loved and respected by the church board of directors, he wondered how the board would continue to love his wife once he passed away. As I continued to talk with him, I knew that it was a real dilemma in his heart, and he felt that the Lord had awakened him to deal with a potential problem.
Once an individual has passed on, people have a way of moving on quickly with their own lives and forgetting the promises they made to that individual. Such was the case in Tennessee when a pastor passed away who had shepherded a church for over 14 years. Before his death, he asked the board of directors (trustees) to please take good care of his wife. Promising to do so, they ensured him that she would be well cared for and lack nothing. When the pastor did passed away, the church kept its promise to take care of his wife. The church signed an agreement that they would give her $785.00 twice a month until the year 2010. All was well for a number of months until, for no apparent reason, less than a year later the church felt it was in its best interest to discontinue taking care of her.
Unfortunately, she sued the church and LOST the case. The court ruled that it was the church's right to no longer take care of her because the church was not currently receiving, and never had received any real value (consideration) in return for its agreement to take care of her. Let me explain.
In basic contract law, a contract is not valid unless the party responsible to make payments receives something of value in return (consideration). Therefore, the church won because the consideration they received was from her husband, not her. The wording to protect her should have been in the compensation agreement between the pastor and the church stating that in consideration for his services, if he passes away, the church will continue to pay his spouse x amount per week/month for x period of time. Pastor, please do not think that your church board would never do this. It is my experience that many retired pastors have often had church boards not pay them their retirement pensions and other deferred compensation agreements. Without clearly written contracts you run a high risk of losing out.
Resolve this dilemma by having a Salary Compensation Package!
There are two legal conditions that need to be met in order to ensure that your spouse is taken care of in the event of your death. The first one is usually enough. However, if you meet the first and the second, you create a court proof agreement that will ensure the care of your spouse as dictated in your compensation package. The conditions are as follows:
1. Consideration: As stated earlier, the language in your compensation package must contain a statement indicating that in consideration for the services the pastor renders the church as a minister (as provided for in his job description), the church is paying the pastor and also making payments to his wife in the event of his death. If the salary compensation package clearly states that in consideration for the pastor's services the church, will, in the event of his death, make payments to her in a certain amount and for a certain period of time, then it becomes enforceable by law.
2. Promissory estoppel: This is a doctrine that is interpreted by the courts to mean that the church's promise to pay the pastor and to take care of his wife is enforceable by law even without consideration if the promises induced the pastor and his wife to rely on those promises to their detriment.
The bylaws are not enough!
Some churches believe that having language in the bylaws stating that the pastor's spouse shall be taken care of in the event of his/her death will ensure it happens. That is not true. Additionally, the IRS does not allow such language because by regulation, which is the full force and effect of law, it is considered private inurement. Taking care of the pastor's spouse in the event of early death must always be an item negotiated in the contract in order for it to be valid.