Our church voted to Disaffiliate from the UMC. Now what?

Disclaimer: I’m a CPA…not a lawyer. Consulting a lawyer for some the legal stuff would be a good idea. There are a ton of links at the bottom of this post. Those are more important than usual with this post. I’m going to outline what I understand the church should do after voting to Disaffiliate. The may be easier to digest for some:

  1. Vote on Joining GMC: Approve a resolution. Church can decide if you need a simple majority or super majority. The minutes or the resolution itself needs to be signed by the chair and secretary so it can be sent to GMC.
  2. Choose a New Name: I have links to the Secretary of State name searches below to see if the name is available. Should approve this at some kind of all-church meeting.
  3. Finalize Disaffiliation Agreement: The Dakotas UMC has been great to work with so far. Here’s a template agreement. The sooner you lock in the numbers, the better.
  4. Trustees Approve Dissolution: As part of the Disaffiliation Agreement, the old church corporation will be dissolved, and everything will be transferred to a new church corporation with your new name. Remember to name the New Church as the successor! The Trustees approve a resolution to do this.
  5. Prepare Secretary of State Filings: I strongly encourage you to work with a lawyer for this part as well as the Deed work. You’ll need to file Articles of Dissolution for the old church corporation and Articles of Incorporation the new church corporation. These can be prepared at this time.
  6. Prepare Deeds: I think you just need to prepare a Quit Claim Deed to be filed with the County. The Conference will do similarly to remove the Trust Clause.
  7. Vote at Annual Conference: This is where the Disaffiliation Agreements are approved. Remember, you’re still United Methodist until the Disaffiliation Date.
  8. File with Secretary of State: The paperwork should have been ready to go. Usually this takes less than a week for State to process.
  9. Get a New Tax ID: You’ll cease using the old EIN after the Disaffiliation Date so you’ll need a new one. This is super quick to apply online.
  10. Cancel Old EIN: You’ll need to wait until you make your final tax filings (W-2’s and 1099’s) before you do this but here is the instructions.
  11. New Web Address: If your church has a website, I’m guessing you’ll need a new web address and new emails.
  12. File Deeds & Pay Conference: Just before the Disaffiliation Date, file those Deeds with the County and send that check to the Conference.
  13. Records & Signage: You’ll also need to make arrangements with the Conference to receive your records (membership, minutes, etc). You can maintain copies for yourself. Also, follow through with removing and signage that advertises your church as a United Methodist church.
  14. Updating with Banks & Vendors: Everyone you do business with will need to have your new name. The big one will be your bank. Because you’ll be a new corporation with a new Tax ID, this may take longer than normal.
  15. Charge Conference: Your church will likely have to hold it’s own charge conference. Run it like regular…except without a District Superintendent. You’ll need to approve a budget, nominations for leadership, and the pastors housing. Those cutting payroll will want a Clergy Comp Form and to know about the pastor’s pension and health benefits.

Useful Links

  6 comments for “Our church voted to Disaffiliate from the UMC. Now what?

  1. Roscoe Blackwell
    February 13, 2023 at 12:07 pm

    Why is it necessary to establish a new TIN? Why can’t we just execute a name change and keep the same TIN?

    • February 13, 2023 at 6:34 pm

      That was my thoughts too, Roscoe. The Conference was pushing setting up a new corporation and TIN so I was skeptical. After speaking with a couple of lawyers, it’s a pain but it’s likely the best way for a clean break.

      • Laura LeGrand
        February 26, 2023 at 2:18 pm

        Excuse me Jeff; it is a Quit Claim not a Quick Claim.

      • February 27, 2023 at 11:10 am

        Thanks, Laura! I had said it correctly in the video, but wrote it incorrectly in the post. Good catch. I’ve made the correction.

      • Roscoe Blackwell
        February 27, 2023 at 8:43 pm

        I’m seeing it from a different angle, where the disadvantages of a new TIN (losing our low-rate mortgage; losing and/or starting over with our sales tax exemption, state daycare licensure, various grants; starting all new financial/vendor/other accounts, etc.) outweigh any other considerations I can think of. Can you elaborate on the lawyers’ comments re: “best way for a clean break”?

      • February 28, 2023 at 7:16 am

        The banking and vendor changes have been a pain. It’s been a while since I had that conversation with the lawyers. I remember our Conference requiring churches to incorporate anew with a new TIN so my big concern was about bequests and endowments. For that concern, they assured me that we just needed to make sure that when the UM church was dissolved, we named the new church as the successor.

        As lawyers, I think they looked at the liabilities that might be connected to the church when it was United Methodist. It would also be a way to ensure all the legal documents were aligned. A number of churches have deeds with the old EUB or ME names on them.

        I did have one church that was allowed to not re-incorporate. I assume they kept their TIN as well. Part of the reason was they were a UMC/UCC church.

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