Fishlin and Fishlin Logo 212.736.8000
Three generations of our family have provided quality legal representation in Trust, Estate and Guardianship matters in New York For over 90 years

Estate Planning Newsletter

Constructive Trusts: Fraudulent Transfer of Property

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.

  • Overseas or Foreign Asset Protection Trusts
    In today’s litigious society more individuals are inquiring about asset protection planning, especially those individuals with a high risk of potential exposure to liability, such as business owners, doctors, or those involved in... Read more.
  • The Effect of Inheritance on Child Support Payments
    The federal Child Support Enforcement Act of 1984 requires each state to develop its own set of systematic guidelines for calculating awards of child support. Generally, state child support guidelines are based on the parents’... Read more.
  • Estate Tax Changes Bring Calm After the Storm
    Much to the relief of many, the American Taxpayer Relief Act of 2012 (“2012 Tax Act”) was enacted in the beginning of 2013, making permanent many of the tax benefits that were scheduled to expire at the end of 2012. The... Read more.
  • Special Needs Trusts and the Disabled
    Some government statistics estimate that between 15% and 20% of all Americans have some form of disability. It is also estimated that the majority of disabled persons will need to avail themselves of public assistance to help pay the... Read more.
Estate Planning News Links
Share This Page: