Do Churches need the Federal 501c3 Process? No, but…

     A little known fact is that, per the free-exercise clause of the First Amendment of the United States Constitution and the very valid rationale that the power to tax is the power to destroy, churches are NOT required to formally apply for 501c3 Federal Tax Exemption to be in actuality tax exempt and to receive tax deductible gifts from donors.  Members of the congregation, if they itemize their taxes, can deduct their yearly donations from their gross income, so long as the church meets the I.R.S. definition.  No laborious and massive form 1023 process to partake of (a legal colonoscopy), no hefty filing fees required and no extensive I.R.S. involvement through the life of the organization is absolutely necessary.  The majority of churches, though, do subject themselves to this process either out of ignorance or because they were told it was absolutely necessary to be exempt. 

     Are there any actual benefits to traveling down this path, however?  Yes, there can be, especially in an interesting, “tail wagging the dog” way.  The popular perception is that federal confirmation is absolutely necessary, so it can be helpful with the general public to solidify the legitimacy of your organization.  Completing form 1023 and being recognized by the I.R.S. can lead to increased donor confidence and reassurance from being officially listed as a tax exempt organization on the I.R.S. roles, that are searchable online.  You will receive an official letter from the I.R.S. recognizing your exemption that you can show to prospective donors.  Such listing can also lead to a greater likelihood of receiving estate gifts from members of your congregation. 

     If you are curious if it makes sense for your church to go down this rabbit hole, we would be happy to give you the pros and cons based upon your particular church’s mission and vision.


An Essential Choice for Every Parent – Guardianship Appointments

A dark and dismal thought for a semi-bright Friday afternoon, I know, but if both you and your spouse or partner unexpectedly pass away while you have minor children, who is in charge?  Further, as children cannot inherit any property until they reach the age of majority, who will make sure whatever assets you may have actually get to them at the right time for college or for their amazing business start-up idea?

If a legally enforceable written guardianship appointment is not made in advance in your will or trust documents, the answer to both of these questions is that the very disinterested bureaucracy of the court will decide with no idea what your actual intentions were while you were alive.  The court will also require very complex and costly guardianship petitions and hearings to make their own determination for you.  Your estate will be forced to pay the costs of these proceedings and a traumatic mess for all involved in an already difficult time will be created.

None of this has to happen, though.  Pennsylvania law provides that, “a person competent to make a will, being the sole surviving parent or adopting parent of any unmarried minor child, may appoint a testamentary guardian of the person of such child during his or her minority, or for any shorter period”.  20 Pa.C.S. § 2519(a).  Your intentions, absent proper written evidence, are not enough, however.  “A person’s wish, not expressed in her will, was not equivalent to a testamentary appointment”.  Baccaro Estate, 88 Pa. D. & C. 42 (1953).

The inexpensive creation of a “guardianship of the person” for your children will allow you to decide, in case of the worst, who has primary physical custody.  The additional inexpensive creation of a “guardianship of the estate”, in the form of a contingent testamentary trust, will allow you to appoint a separate person to manage your children’s inheritance.  These two people will check and balance each other for your children’s benefit.

This all sounds very complicated, but these are fairly simple, customized clauses, that our office will strategically place in a proper Last Will and Testament with Contingent Trust that we recommend for most parents in most cases.  Please feel free to give us a call for more information.  Enjoy your weekend!



Hi, my name is Chris, and I’m hoping to provide you with bunches of useful and interesting legal and life information to help you, your family, and your small business.  I’m an attorney (my website), real estate investor, gentleman farmer (think Green Acres), and a very amateur Cello player.  I’m looking forward to sharing a few helpful ideas with you!

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