Estate Planning Newsletter

• Duties of a Trustee
  Every trust must have a trustee to properly administer the elements of the trust. Trustees can be individuals, financial institutions or even organizations. A trustee follows the precise instructions of the trustor (or the... Read more.
• Totten Trusts for Assets Payable on Death
  A decedent’s assets may be transferred upon their death to their heirs or other beneficiaries through probate. “Probate” is the legal process by which a court determines who receives a decedent’s assets under... Read more.
• Court-Appointed Conservators
  A “conservator” is a court-appointed individual assigned to handle the daily affairs of those who cannot care for themselves due to physical or mental limitations (the “conservatee”). Conservatorships are... Read more.
• Gift Tax and the Annual Exclusion
  A gift tax is a tax on the privilege of making gifts to others while the taxpayer is still living. The gift tax supplements the estate tax, which taxes gifts made upon death. The gift tax was created to frustrate the attempts of those... Read more.

• New retirement law affects IRAs, estate planning
• No, your IRA was never intended to be a vehicle to pass along your wealth
• 4 Estate Strategies for Affluent Retirees Under the SECURE Act
• How the holidays are perfect for estate planning
• Tom Petty’s widow, 2 daughters settle legal dispute over singer’s estate

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.

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