Encouraging Estate Gifts in Your Church

Americans gave more than $30 billion dollars in bequests made through wills and estate plans in 2016, according to a 2017 Giving USA report. But few churches talk to their members about how they can make such gifts to their churches after they die. For example, a 2013 study of Southern Baptist pastors found that 86 percent provided no information to church members about estate planning.

"Many pastors are apprehensive even when speaking about tithing," says John Kea, executive vice president and general counsel for the Nashville-based Southern Baptist Foundation. "Few know where to start when talking about estate planning."

And few churches have the infrastructure in place to help church members who want to make a bequest, Kea said.

Yet many church members may be open to remember a church in their estate, said Steve Allison, a financial services representative for Covenant Trust Company—a financial management and legacy planning resource to individuals, charitable organizations, and ministries, both inside and outside the Evangelical Covenant Church. Through workshops Allison gives to church groups on estate planning, he reminds churchgoers that they have often benefited from Christians who came before them.

"We are all beneficiaries of somebody else's generosity," Allison said. "Each of us has the opportunity to do the same for the next generation."

Financial planners say that churches can play a key role in encouraging their people to be generous at the end of their lives. Everyone needs some kind of plan to disburse their assets when they die. And making a charitable gift can be part of that plan.

Still, there are risks. Churches and pastors often have great influence in the lives of church members. If they press too hard for churchgoers to make a bequest, or even appear to suggest such an act, there could be a risk of having a court find the presence of "undue influence," which could jeopardize the gift altogether.

Note. Undue influence is more than persuasion or suggestion. It connotes total dominion and control over the mind of another. As one court noted, "undue influence is that influence which, by force, coercion or over-persuasion destroys the free agency" of another. For more on this topic, with help for determing whether something is undue influence, see the “Undue Influence” section in the Legal Library.

What churches can—and cannot—do

Pastors are free to mention estate planning from the pulpit, said Candie Deming, an attorney with Baltimore-based Whiteford, Taylor & Preston LLP.

Churches can also put information about estate planning and bequests on their websites.

They can host educational workshops on estate planning.

But they have to be careful not to ask an individual church member to make a bequest to the church. That's because pastors are considered by courts to have a "confidential relationship" with a church member.

Note that Findlaw defines a "confidential relationship" (or "fiduciary relation") as a "relationship in which one party places special trust, confidence, and reliance in and is influenced by another who has a fiduciary duty to act for the benefit of the party."

In such a relationship, Deming explained, the parties are not on equal terms. One party is afforded great respect, authority, and trust due to that person's position or title—such as pastor. Suggestions or comments by the respected person could be heard as mandates that influence the other to act in a way the person might not otherwise act.

This means pastors, by the very nature of their roles, possess authority in their congregations that can be misused, whether intentionally or not. That can create legal problems.

"Ministers have to be doubly careful about stepping over the line," Deming warned. "If they say, even in a teasing way, 'You should leave all your assets to the church,' that could be interpreted as a mandate."

Ministers also often see people when they are at their most vulnerable—when they've been sick or are in a moment of crisis. Ministers also visit people when they are homebound or otherwise impaired. That's not the time to talk about bequests, even if the church member brings it up, Deming stressed.

"Pastors should never raise this issue in one of those instances," she said. "And if someone brings it up, the pastor should be quick to say, 'You should talk to your attorney.'"

Pastors should avoid any hint that they are using their influence to coerce someone to give, especially when it involves a bequest or other gift in a person's will.

"The disposition of a person's assets has to be the result of their own free will," said attorney Mary Ellen Willman, a partner with Whiteford, Taylor & Preston. "If the person making out their will no longer has free will—that is undue influence."

Accusations of undue influence can land a church or other ministry in court. Consider this case analysis by Richard Hammar:

A 96-year-old woman died, leaving the bulk of her estate to [a church in Oklahoma] she had attended for many years.

For many years, the woman suffered from alcoholism and during the 1970s her health and living conditions deteriorated. From 1980 to 1983 the pastor of a local Baptist church became closely acquainted with her and visited in her home several times. By 1984 all of the woman's friends were members of this church. The pastor arranged for several of them to regularly assist the woman by cleaning her home. Through this process the woman became very dependent upon the pastor … .

Although in 1983 the woman attended several sessions of an estate planning seminar at her church, she failed to make the last session where a "will information guide" was distributed. In 1984, when the woman was 89 years of age, the pastor brought her a copy of the "will information guide" and spent several hours assisting her in cataloging her assets. The pastor later asked a church member who was an attorney to contact the woman and discuss her will's preparation … .

After the will was drafted, it was sent to the pastor who delivered it personally to the woman and discussed its terms with her … .

She reviewed her will and signed it … .

Seven years after the will was signed the woman died. Her nephew [the decedent's sole heir] claimed that the gift to the church should not be honored since it was based on "undue influence." …

A trial court agreed with the nephew that the pastor's actions amounted to undue influence since he had overcome the woman's "free agency." A state appeals court concluded that since the pastor received nothing under the will he was incapable of unduly influencing the deceased. The nephew appealed this ruling to the [Oklahoma Supreme Court]. The supreme court reversed the appeals court's decision and reinstated the trial court's order that invalidated the gift to the church.

Keep your distance

Churches can get into trouble if they get too involved in the process of procuring a gift or bequest. That's especially true if they recommend that church members work with a specific lawyer or a financial planner with ties to the church.

"There have been cases where the attorney who drafted the will was a member of the church that received the gift," attorney Willman said. "That's obviously not a good idea."

Churches and pastors also should avoid having any involvement in drafting a will or a bequest for church members. Again, that includes recommending a specific lawyer or advisor for a church member to work with.

"The church doesn't want to even give the appearance of procuring the documents that leave the church money," attorney Deming stressed.

What about unhappy family members?

Deming said that a church should not refuse a bequest simply because the donor's family is unhappy about it.

Pastors and church board members have a fiduciary obligation to watch out for the church's best interest, she said. If there's controversy over a gift, church leaders must make sure no one from the church played an improper role at any point. If that happened, then a church should back away and decline the gift. But if a church acted properly, then the church shouldn't automatically refuse a gift, even if the donor's family is unhappy.

"I don't think a church should just immediately say no," Deming said. "If [the gift] was given in good conscience—and [the church] believes this person gave it to the church freely and out of love—the church should not automatically back away just to keep the peace."

It's up to the potential giver

Whenever Allison from Covenant Trust Company speaks to a church group about leaving money to a church, he starts by telling them that every step of the estate planning process is voluntary.

"I will flat out say to people—it is not my job to convince you to leave a gift to a ministry," he said. "If that is something you want to do, it is my job to be a resource for you and walk you through the process."

If people have supported a church throughout their lives, then they may want to remember that church in their wills. That's where an outside expert, like a financial planner or attorney, can help.

If a pastor knows that someone wants to remember a church in their will, the best thing to do is to recommend that they do so in consultation with an independent, outside advisor.

But the decision is always up to the church member, Allison stressed.

"This has got to be something you want to do," he said. "Not an idea that you were coerced into doing."

Four tips for helping church members with estate planning

1. Nurture a culture of generosity

A bequest to a church doesn't usually come out of the blue, said John Kea, executive vice president and general counsel for the Nashville-based Southern Baptist Foundation. It usually comes from someone who has made generosity a habit. Churches can help their people establish that habit during their lifetimes—and then to remember the church in their wills when they pass on.

2. Talk about possibilities, not obligations

"I've never asked people for money," said Chris Andersen, president of the Minneapolis-based InFaith Community Foundation. "I tell stories. And I tell people what is possible." Rather than asking for money, he suggests that churches tell their members about plans for the future and how their generosity can fund ministry. He stressed that giving shouldn't be an obligation but a joyful response to what God has done in our lives and what God is doing in the world. Pastors need to be experts at sharing that kind of vision, he added, and creating systems that make it easy for people to give.

3. Look out for the best interests of church members

When a church member decides they want to make a gift, it's time for a church to step back, said Preston Branaugh, an estate-planning attorney in Arvada, Colorado. The church should remind the member to consult his or her own lawyer and financial advisor. And the pastor or church members should not be present when wills or other documents are signed by the member.

4. Explore pertinent questions

Branaugh encourages church leaders to ask themselves questions like these:

• Is the donor susceptible to undue influences because of a medical condition or other impairments?
• Would it appear to a third party that there was an opportunity for the church to have undue influence? Are church leaders relentlessly calling on the person, pushing for a bequest?
• Did the church participate in the execution of the document?
• Is the donor making a distribution that seems out of character with previous giving habits or with previous estate planning?