How To Steal a Church...
...and if it happens during the marriage, does the spouse get part of the church in an equitable division of marital assets?
Property division in a divorce can sometimes be a rather baffling process.
Imagine, if you will, that I represented the wife of a Mr. Preacher Man in a divorce case. The husband had been the minister of a church in another state for a number of years as the average age of the congregants increased. The population of the church dwindled as the congregants died or left without new members replacing them. And he did little, if anything, to bring in new members.
Eventually, there were but a few members and they left as the preacher’s sermons (conveniently) became more and more disconnected with the beliefs and tenets of the congregants. And guess who gets elected to the board of the church? Mr. Preacher Man, his Daddy, and his brother. So, the building is sold to another congregation that formerly was renting a building for worship. The sale price of $600,000 was paid $300,000 down with the balance due in 3 years and a monthly interest payment on the unpaid $300,000.
Preacher man and his wife move to Williamson County and purchase a house with the proceeds from the sale of the out of state church building and title the residence in the name of (his former out of state) church. This is a gig. A free house to live in and interest on a $300,000 note for income that is tax-free to the ultimate user. Well, Mr. Preacher Man gets a job as a minister at a local congregation but that didn’t last long. By this time, he has figured out that sowing discord among congregants has its benefits. After getting fired by the local church, he begins having services in the marital residence. This arrangement didn’t last long as the neighbors complained and the codes department quickly put a stop to somewhat large (20 cars or so) church services, but that worked out ok.
The note matured and the church (of one, and his wife) took the proceeds and purchased a house in Florida. And of course, Mr. Preacher Man needs a baptistery for his new church and so one was installed, complete with a diving board right in the backyard of his new house, uh church. Let the soul saving begin. I questioned Mr. Preacher Man in the deposition about how many people were baptized in this baptistery and he couldn’t remember. 10? Can’t remember. 5? Can’t remember. Was anyone baptized in this baptistery? To which preacher man replied, “Mr. Street, I’m not Church of Christ like you, we don’t actually require immersion!” During this time, not much in the form of church services took place as our preacher friend taught school and was elected to the local city counsel.
The Williamson County house is sold shortly thereafter and another house is purchased in Williamson County in the name of the church and guess who moves in that house? The daddy of Mr. Preacher Man.
Mr. Preacher Man had good timing as the Florida residence (I mean, church) increased in value and was eventually sold for $600,000. And with the proceeds from that sale a new house (I mean church, pardon me, please) was purchased back here in Franklin.
Well, the marriage was not as good as the real estate market. After years of emotional abuse, (dutiful preacher’s wives don’t or can’t question what their husbands do) Mrs. Preacher’s Wife could not take living in the marriage any longer and filed for divorce. So in this marriage of 20 or so years, what was the marital property subject to division by the divorce court?
The wife takes the position that the house/church is marital property and she is entitled to half the value. Mr. Preacher Man says “Oh no it's not, it’s a church and services are over for you baby, time to leave!”
On some level, it's kind of like representing the wife of Jesse James. Would she be entitled to the proceeds of a train robbery committed by ole Jesse right before she filed for divorce? It doesn’t feel quite right, but then does Jesse get to keep all of his ill-gotten gains while the wife is left out in the cold?
SO WHAT HAPPENS?
Tennessee is an “equitable division” state which means that distribution of marital property must be fair, just and reasonable based on the factors set out in the law. Equitable division does not necessarily mean an equal distribution.
Before a property is divided, it must be identified, classified and valued. Identification is determining all the property owned wholly or in part by the parties. Then, every asset and debt must be classified as marital or separate property as Tennessee courts divide only marital property.
Because the real estate was not titled in the name of either of the parties to the divorce, it was not classified as marital property subject to division by the divorce court. Wife, now former wife, doesn’t get any interest in the church property. But she sleeps a lot better at night.