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  • August 8, 2016

New Maryland Case Allows Court to Distribute Assets of Charitable Corporation

A new decision reported by the Court of Special Appeals of Maryland has given a broad definition to what is a “charitable corporation” and also an expansive reading to the power of a court to transfer the assets of a charitable corporation that is not functioning. The case is Sydnor v. Hathaway decided on July 27, 2016.  The dispute was between the Union Baptist Church in Baltimore and a charitable corporation that it created, known as the Union Baptist Development Corporation.  The Development Corporation had been formed by the Church in 1981 to hold title to property that the Church…

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  • January 13, 2016

The Maryland Prudent Investor Rule

The Prudent Investor Rule was codified in Maryland in 1994, by §15-114 of the Estates & Trusts Article. The statute allows a fiduciary to utilize Modern Portfolio Theory in making investment elections for a trust, an estate or other beneficiary investments. Modern Portfolio Theory frees a trustee from rigid and outdated trust investment practices, and allows use of the full range of modern investment tools in selecting and managing portfolios for trust beneficiaries. The Prudent Investor Rule, however, only applies to a fiduciary that is a trust company or an investment advisor, or an individual trustee who makes a valid…

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  • December 28, 2015

Election Year Rules for Churches and Non-Profits

2016 is a national election year, in which Americans will choose their political leaders at every level of elected government.  Churches and non-profit organizations have much to say on the issues being debated and have a First Amendment right to have their views heard.  The Internal Revenue Code has prohibitions against campaign activity for or against political candidates.  This article reviews the state of the law and the current IRS practices. As a first matter, Churches and non-profits have an absolute First Amendment right to speak out on political issues and for or against candidates, however and wherever they choose,…

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  • July 6, 2015

What Impact Will the Supreme Court Decision on Same Sex Marriage have on Maryland Churches?

On June 26, 2015 the United States Supreme Court ended the national debate over same sex marriage in its 5 – 4 decision in Obergefell v. Hodges. The majority opinion authored by Justice Anthony Kennedy, found that states which prohibit marriage to same sex couples deprive them of their liberty, contrary to the Fourteenth Amendment of the United States Constitution. The Court ordered that all States recognize and sanction marriages between same sex couples “on the same terms and conditions as marriages between persons of the opposite sex.” The case has generated legal, moral, and religious controversy. Many Maryland churches…

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  • May 20, 2015

How to Use Christian Mediation

Disputes within churches, or between ministries, can often give rise to legal claims. In litigation, courts will decline to resolve matters of religious doctrine, but try to apply “neutral principles of law” to resolve disputes. But many Christians believe that such disputes should not or cannot be resolved in legal courts, often quoting the verses at I Corinthians 6: 1 – 9 not to even file such an action. The mandate of that Scripture is that such matters should be resolved within the Church. To this end, many churches have dispute resolution ministries. Also, Peacemaker Ministries (www.peacemaker.net) provides a formal…

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  • November 18, 2014

Minister’s Housing Allowance Survives Challenge

In a big win for churches and other religious organizations, the United States Court of Appeals for the Seventh Circuit has reversed a District Court decision which had declared the Minister’s Housing Allowance to be unconstitutional. The decision (issued on November 13, 2014) preserves the annual $700 million tax break given to religious organizations and their ministers. The case is Freedom from Religion Foundation, Inc. v. Lew, which arose on appeal from the United States District Court for the Western District of Wisconsin. At issue is Section 107(2) of the Internal Revenue Code, which states that for a “minister of…

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  • May 20, 2014

Court Expands Rights of Maryland Churches to Build

Churches have long faced challenges in zoning and local land use ordinances when looking to build.  Legal disputes have pitted the right of the Church to religious freedom against the right of the local community to regulate and/or restrict land use.  Now, the United States Court of Appeals for the Fourth Circuit has issued a decision which has clarified and expanded the rights of churches in Maryland looking to build, and set a higher standard for counties looking to restrict church building through zoning and other land use ordinances. The case is Bethel World Outreach Ministries v. Montgomery County Council. …

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  • April 15, 2014

Religious Freedom Before the Supreme Court: The Hobby Lobby Argument

The most intensely debated field of law right now is the right of freedom of religion in the business community.  The debates have been in the forefront of the news, as the Hobby Lobby case came before the United States Supreme Court. On March 25, 2014, the Supreme Court heard the case of Sebelius v. Hobby Lobby Stores, Inc., putting the Affordable Care Act back at the Court for another constitutional challenge.  The case presented “an issue of first impression,” an issue on which all sides agree that there is no controlling precedent: Can a private, for profit business assert…

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  • February 25, 2014

The Formation and Structure of the Maryland Religious Corporation

A Religious Corporation is a non-stock corporation.  As such, the provisions of the Maryland general statutory corporate law will apply to it, unless the provisions of the statute clearly require otherwise.  Maryland Code, Corporations & Associations Article § 5-201. A Religious Corporation is created under Title 5, Subtitle 3 of the Maryland Code, Corporations & Associations Article.    This subtitle sets out the means of forming a religious corporation under a “congregational form of church government” contemplated by the statute.  Mt. Olive African Methodist Episcopal Church of Fruitland, Inc. v. Board of Incorporators,  348 Md. 299 (1997).  However, the subtitle…

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  • February 4, 2014

The Historical Roots of Maryland Church Law

Maryland’s law concerning Churches and Religious Corporations grows out of the State’s history of religious freedom, which is the oldest such tradition in the Nation.   The General Assembly of Maryland, meeting in St. Mary’s City, adopted The Act of Toleration (formally “An Act Concerning Religion”) on April 21, 1649. This Act secured religious freedom for all Christians “inhabiting, residing, trafficking, trading or commercing within this Province.”  The Act established both policy and protection for religious worship:  And whereas the enforcing of the conscience in matters of religion hath frequently fallen out to be of dangerous consequence in those commonwealths…

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