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May church be used as a marital asset in a divorce?

Your Legal Questions Answered

May church be used as a marital asset in a divorce?

May a church be used as marital property in making a divorce settlement? Can it be considered a marital asset and its value split between the pastor and his wife?

Ordinarily the value of a church, like any other charitable entity, would be considered a separate asset and not a personal asset of any participant in that charity.  Therefore, the normal and appropriate answer to the question should be “no.”

But at least one court has allowed a spouse to try to “pierce the corporate veil” of a church on the theory that it is the “alter ego” of the pastor and is effectively an asset of the pastor because the pastor treats it as if it were a personal asset.  (See Nonprofit Issues®, 11/1/07)  A court may not say that the church has to be split, but it could order the pastor to find other funds to pay the spouse a part of its value.

The state Attorney General could have an interest in the situation, but is less likely to intervene in the dispute if it involves a church rather than some other type of charity, or if the court does not seek to break up the entity but simply orders the pastor to pay over funds from other sources.

Wednesday, October 21, 2015

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