SB 586 — Corporations and Associations: Methodist Church Trust Requirement Repeal & Disaffiliation Requirements (Maryland)
Status / Key dates
- Introduced: Jan 23, 2025 (Sen. Muse / Judicial Proceedings committee)
- Enacted: Approved by Governor Oct 10, 2025; Chaptered as Chapter 588, Statutes of 2025
- Effective date stated in the Act: October 1, 2025
Purpose / intent
- Remove an existing statutory rule that all assets of any Methodist local church in Maryland are held in trust for and subject to the United Methodist Church (UMC).
- Provide an explicit statutory path for a local Methodist congregation to disaffiliate from the UMC and to retain ownership of its real property, while addressing reimbursement for UMC investments in that property.
What the bill does — main provisions
1. Repeal of trust requirement
- Repeals former Corporations & Associations provisions (previously cited as Sections 5–326 and 5–327) that (a) declared all assets of any Methodist church to be held in trust for the UMC and (b) treated absence of an express trust clause in old deeds as not relieving a local church of UMC connectional responsibilities.
New disaffiliation/ownership rule (new Section 5–326)
- A local church MAY disaffiliate from the United Methodist Conference and retain ownership of its property, subject to the reimbursement provisions below.
- A disaffiliating local church MUST reimburse the UMC for financial investments the UMC made for acquisition, maintenance, or improvement of real property used by that local church.
- The reimbursable amount is to be determined from a “full and transparent accounting” provided by the UMC of all funds the UMC contributed for acquisition, maintenance and improvement of that real property.
- The disaffiliating church may not be required to reimburse the UMC for amounts attributable to investments made by the local church itself.
Technical: renumbering
- The bill renumbers an existing section (5–328) to conform to the repeal/added section structure.
Who is affected
- Local Methodist congregations (local churches) in Maryland that are currently affiliated with the UMC and may consider disaffiliation.
- The United Methodist Conference(s) operating in Maryland (financial/accounting and property interests).
- Church trustees, congregational leadership, and counsel who will negotiate or document disaffiliations and property transfers.
- Potentially creditors, purchasers, and courts that may resolve disputes about property ownership and reimbursements.
Potential impacts and considerations
- Legal and transactional: removes the automatic statutory trust in favor of a negotiated disaffiliation model, likely increasing the importance of accounting, negotiation and, in contested cases, litigation to determine reimbursable amounts.
- Financial: UMC conferences will be entitled to reimbursement for their capital investments in local church real property, but must substantiate those claims via accounting; local churches retain credit for their own investments.
- Governance: reduces statutory control of the UMC over local church property (no longer automatically held “in trust” by church trustees for the denomination).
- Practical: the statutory framework aims to balance local property ownership with reimbursement for denominational investments; implementation will depend on accounting practices, available records, and any transition rules not included in the text.
Text / statutory references
- Repealed: former Article — Corporations & Associations Sections 5–326 and 5–327 (Annotated Code of Maryland).
- Added: new Section 5–326 (as summarized above). Act also renumbers Section 5–328 to 5–326/5–327 as part of reorganization.
- Effective: October 1, 2025 (Act language).
