Estate Planning Newsletter

• Facts About Resulting Trusts
  There may be instances where property under a trust is transferred to the wrong beneficiary. This transfer can be corrected through a remedy called a resulting trust or an implied trust. Do not confuse a resulting trust, which is... Read more.
• Marital Deductions & Non-Citizen Spouses
  A QDOT is a specific type of marital deduction trust that is designed to ensure that non-citizen spouses will eventually pay any taxes that may be due upon distribution of the principal from the trust, even if the surviving spouse... Read more.
• The Legal Doctrines of Equitable Adoption and Adoption by Estoppel
  In general terms, the judicial doctrine of “equitable adoption” recognizes a valid parent-child relationship in the absence of a formal adoption procedure, holding a person who has acted like a child’s parent for a... Read more.
• Valuing an Interest in a Company for Estate Tax Purposes
  In 2001, Congress passed legislation incrementally increasing the amount exempt from federal estate taxes and completely eliminating estate taxes in the year 2010. However, the legislation contains a “sunset” provision... Read more.

• Estate Planning Benefits Gain Momentum
• Enjoying the Ride: Estate Planning
• Three Overlooked Benefits of Estate Planning
• Expert advice on digital estate planning
• Estate of late NFL QB Dwayne Haskins reaches partial settlement in lawsuit over death

Transferring Property to its Rightful Owner

A constructive trust is a remedy imposed by the court when a person has wrongfully attained property. The court basically takes the property away from the wrongful owner and puts it in trust for the rightful owner. In the estate planning/administration context, a constructive trust is usually imposed when there is wrongful conduct on the part of the trustee or beneficiary.

Types of Wrongful Conduct

Any wrongful activity that leads to the unfair acquisition of property may be cause for a constructive trust, including:

• Fraud
• Accident
• Mistake
• Undue influence
• Violation of trust or fiduciary duty (for example, when a trustee purchases property in his own name rather than in the name of the beneficiary)
• Homicide (for example, to obtain life insurance benefits)

Remedy Under Constructive Trusts

A constructive trust is imposed by a court as a result of a complaint by an affected party (typically a trustor or beneficiary of a trust). It may provide that the property pass from the wrongful owner to the rightful owner, or it may provide for the property to be held by a trustee for the rightful beneficiary.

However, if the unlawful owner has damaged or destroyed any of the trust property, the rightful owner is entitled to a money judgment for the value of the property.

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