It is always a sensitive and difficult decision for the Church Council , but if the time comes when it is decided that the Local Church is no longer viable then there are decisions that the Church Council must take in relation to any trusts or bequests they hold before they have their final Church Council meeting.
It is a common misconception that on the closure of the Local Church that the monies held automatically pass to the Circuit, but this is not the case. Not all monies held locally are governed by the Model Trusts and instead we need to turn to the provisions of the Charities Act 2011, soon to be updated by the Charities Act 2022.
1. Types of Trusts / Funds:
There are various types of trusts which the Church Council can hold. As a basic overview, these can be summarised as follows:
1.1. General Fund:
These are monies which do not fall into any of the categories below and are generally the monies which the Church Council collects through the weekly offering or through general fundraising events or donations to the church. The monies are governed by Standing Order 650 and are Model Trust monies.
1.2. Local Proceeds of Sale:
These are monies which derive from the sale of Model Trust Property where the proceeds are held for the managing trustees of the Local Church generally, because the sale falls within the exceptions of Standing Order 945. These monies are Model Trust monies and are available for their general use and are governed by Standing Orders 915 – 917.
1.3. Model Trust Bequests:
These are bequests that have been left to the Church Council through an individual’s will. They are always unconditional and are fully available to the Church Council for their general purposes. These monies are again Model Trust monies, are available for general use and are governed by Standing Orders 915 – 917.
1.4. Restricted Trusts / Bequests:
These types of trusts have had restrictions placed on the use of the capital monies by the individuals who have gifted the monies to the Church Council. The restriction can be anything from the maintenance of the church building to the provision of music for the church organist. These bequests/trusts fall outside the Model Trusts and are governed by Charity law.
1.5. Permanent Endowments:
This is where the capital must remain intact, and the Church Council only have access to the income. The income may be restricted to a particular purpose or available to the Church Council for their general purposes. These bequests/trusts fall outside the Model Trusts and are governed by Charity Law.
2. Actions to be taken:
To avoid difficulties later there are various actions that the Church Council can take as soon as a Local Church closure becomes a possibility. These are:
2.1. Contact TMCP as soon as discussions commence about the potential closure of a Local Church so that we can provide guidance on the different procedures that apply to the different types of trusts described above.
2.2. Ensure that at least one Church Council meeting is held before the closure of the Local Church so that the relevant resolutions can be formally passed by the Church Council. If you need assistance on the wording of the resolutions, then TMCP can assist you with this.
2.3. At least two managing trustees must be nominated to sign any Church Council meeting minutes and / or any resolutions required.
If decisions are not made before the closure of the Local Church on who is the successor beneficiary to the bequest/trust then this runs the risk of there not being any identifiable Managing Trustees. The Trusts could also potentially fail. Managing Trustees of the Local Church should contact TMCP as soon as possible in order to obtain the information required so that the trusts can be dealt with in a timely manner, and in accordance with CPD and Charity law. Further guidance will also be produced to accord with the changes brought about by the Charities Act 2022 which come into force this Spring.
If you have any queries in relation to the guidance in this document please contact TMCP Legal for further assistance.