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Officers, Directors, and Trustees

• A Texas appeals court decision addressed the issue of a church trustee's alleged criminal liability for misapplication of church funds. Here are the facts. In 1973, a donor conveyed a tract of land to a church by delivering to three church trustees a deed to the property. A sanctuary was constructed on the property. By 1978, church attendance had declined significantly and weekly services had been cancelled. The three trustees discussed selling the property, and agreed that the property and building were "not theirs personally" but rather "were the Lord's and they should be the work of the Lord's." However, no action was taken. In 1981, one of the trustees sold the property for $100,000 to a third party by signing his own name and forging one of the other trustee's signatures on a deed. The trustee placed the sales proceeds in a church account, and within two months spent almost the ...

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Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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Posted:
  • January 2, 1989