Privacy policy

Blog We prioritize your privacy and confidentiality. At no point do we store, keep, or sell any personal data you provide during your use of our services. All information entered is used solely to facilitate the creation of your estate plan.

Please note that all estate plans are final upon purchase, and no refunds will be issued. However, we understand the need for flexibility and offer the ability to make changes to your plan at no additional cost for the first 365 days after your purchase. After this period, an annual subscription fee of $15 allows you continued access to modify your plan whenever necessary without any extra charges.

Privacy Policy

We prioritize your privacy and confidentiality. At no point do we store, keep, or sell any personal data you provide during your use of our services. All information entered is used solely to facilitate the creation of your estate plan.

Please note that all estate plans are final upon purchase, and no refunds will be issued. However, we understand the need for flexibility and offer the ability to make changes to your plan at no additional cost for the first 365 days after your purchase. After this period, an annual subscription fee of $15 allows you continued access to modify your plan whenever necessary without any extra charges.

Privacy Policy

We prioritize your privacy and confidentiality. At no point do we store, keep, or sell any personal data you provide during your use of our services. All information entered is used solely to facilitate the creation of your estate plan.

Please note that all estate plans are final upon purchase, and no refunds will be issued. However, we understand the need for flexibility and offer the ability to make changes to your plan at no additional cost for the first 365 days after your purchase. After this period, an annual subscription fee of $15 allows you continued access to modify your plan whenever necessary without any extra charges.

Privacy Policy

We prioritize your privacy and confidentiality. At no point do we store, keep, or sell any personal data you provide during your use of our services. All information entered is used solely to facilitate the creation of your estate plan.

Please note that all estate plans are final upon purchase, and no refunds will be issued. However, we understand the need for flexibility and offer the ability to make changes to your plan at no additional cost for the first 365 days after your purchase. After this period, an annual subscription fee of $15 allows you continued access to modify your plan whenever necessary without any extra charges.

The Relax Estate

Guide to Setting Up a Family Trust

A Guide to Constructive Trusts

 

A Trust stands out as one of the most dynamic instruments that can be integrated into your Estate Plan. This is due to the variety of Trusts available, each serving distinct purposes. These sophisticated legal mechanisms are crafted to hold assets for the benefit of another individual or entity, often shielding them from factors that may diminish their value, such as taxes or probate.

Among the diverse Trusts, the Constructive Trust is particularly noteworthy. Unlike other Trusts established proactively within an Estate Plan, a Constructive Trust arises as a remedy when addressing property-related injustices. Trust & Will elucidates the concept of the Constructive Trust, its functioning, and essential details worth knowing. What exactly is a Constructive Trust? It is a form of Trust designed to secure property for an individual or entity with the aim of rectifying a perceived wrongdoing. Typically ordered by a court in instances of unjust enrichment, Constructive Trusts address situations where someone has wrongfully obtained property through fraud, misrepresentation, or a breach of fiduciary duty.

Unlike elective inclusion in an Estate Plan, Constructive Trusts are tools employed by the legal system to rectify wrongs. The court mandates the establishment of a Trust to transfer property ownership from the wrongful possessor back to the rightful owner. Consequently, the legal owner, now holding the property within the Trust, becomes a custodian for the benefit of the person wronged, allowing them to enjoy any appreciation in value. Decoding the term “Constructive Trust” sheds light on its meaning. “Trust” refers to a legal and fiduciary entity managing property for another’s benefit, while “Constructive” implies a circumstance aimed at improvement or a positive purpose. In combination, Constructive Trusts serve to rectify or enhance situations where someone has been wronged, ensuring the rightful transfer of property ownership.

An illustrative example helps clarify how Constructive Trusts operate. Suppose John embezzles $25,000 from Sarah to fund a house down payment. After legal proceedings find John guilty, the court orders the establishment of a Constructive Trust. This Trust transfers home ownership from John to the Trust, safeguarding it for Sarah. The Trust acts as an interim custodian until resolution, allowing Sarah to reclaim the stolen amount or even gain ownership of the house, including any appreciation. Once justice is served, the Constructive Trust is terminated.

Enforcement of a Constructive Trust falls under the purview of a judge, who decides on its implementation. The judge may impose it as an equitable remedy, addressing unfair advantages or interference with a traditional Trust. Importantly, the judge ensures the Constructive Trust is not perpetual, terminating it once the victim is appropriately reimbursed. Distinguishing between a Resulting Trust and a Constructive Trust, both being implied Trusts, clarifies their roles. While a Constructive Trust serves as a civil remedy to restore property to the plaintiff, a Resulting Trust stems from issues in an existing Trust and directs how remaining funds should be distributed.

Consideration of a Constructive Trust arises primarily in civil disputes over property. It is typically invoked in scenarios involving mistakes, breaches of fiduciary duty, embezzlement, coercion, theft, or disputes over property distribution after the owner’s death. In such instances, a court may impose a Constructive Trust to rectify the situation. Contrary to Trusts established in a personal Estate Plan, a Constructive Trust is not something one creates independently. Instead, it materializes through a court order, making legal advice crucial if property-related injustices, such as theft or fraud, occur. In cases where the court determines property restitution, a Constructive Trust may be imposed to facilitate the transfer.

While understanding Constructive Trusts enhances estate planning literacy, it remains a specialized tool for judicial purposes. Typically, individuals won’t encounter the need for a Constructive Trust in their lifetime, as it is a measure employed by the court to rectify wrongs, particularly in cases of fraud or embezzlement. For personal estate planning, various Trust options are available, each catering to specific needs, as outlined in this comprehensive guide.

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