According to the United States Supreme Court, the determination of whether the Methodist Trust clause is a question that is to be decided on a state by state basis. The story behind this decision is as follows:
When it came to judicial decisions concerning the ownership of property, the dominant rule for roughly 150 years in the United States was the “English rule,” which required courts to award property to whichever faction of the church adhered to “the true standard of faith,” meaning the established orthodoxy of a religious group. Under this framework, courts would determine the rightful owner of church property in the event of a schism by examining which faction was most faithful to original doctrine.
This is no longer the rule.
The U.S. Supreme Court held that states have “an obvious and legitimate interest in the peaceful resolution of property disputes.” For that reason civil courts are permitted to address such disputes, but the Religion Clauses in the U.S. Constitution “severely circumscribe the role that civil courts may play in resolving church property disputes.” In other words, Courts may only go so far as resolving property disputes and will not address theological concerns.
In the Presbyterian Church v. Blue Hull Memorial Church, the Supreme Court recognized that “there are neutral principles of law, developed for use in all property disputes, which can be applied without ‘establishing’ churches to which property is awarded.”With that approach, the Court remanded the case for evaluation of a religious property dispute under state law. The term “neutral principles” within the context of church religious property disputes was born. But it was not yet fleshed out. In a concurrence the following year, Justice William Brennan noted that this approach is consistent with the First Amendment only if it is applied “without the resolution of doctrinal questions and without extensive inquiry into religious polity.”
A decade later, the Court decided Jones v. Wolf (1979), the leading church property case to date, the Court specified that neutral principles is to be used in religious property disputes. The Court began its analysis by stating that a Trust Clause does not give rise to a trust unless it is in a “legally cognizable form.”
In the Court’s view, neutral principles “rel[y] exclusively on objective, well-established concepts of trust and property law familiar to lawyers and judges,” thereby producing outcomes reflecting “intentions of the parties.” Though the Court has given states the option to choose between deference and neutral principles, most states have adopted the latter.
More than half of the states within the United States have determined that trust clauses within a denomination are not enforceable. Contact Daniel Dalton at Dalton & Tomich PLC.