What is a Constructive Trust?

A constructive trust is established when a person takes title to property that rightfully belongs to another person; that person has a duty to transfer title of the property to the rightful owner, because if that person retained the title, he or she would be unjustly enriched.  In other words, it wouldn’t be fair if the person was allowed to retain title to the property at the expense of the appropriate owner. 

Process and Legal Requirements

Typically, the titleholder of a constructive trust has gained title to the property by dishonest, fraudulent, or even illegal means.  Therefore, a constructive trust is often accompanied by criminal behavior on the part of the constructive trustee.  A common scenario is when an appointed trustee of a trust misuses trust assets for his or her own benefit, at the expenses of the rightful beneficiaries of the assets and/or income thereon.  In this sense, a constructive trust is not a trust at all in the most common meaning of the word.  Because of the titleholder’s wrongful actions in obtaining title to the property, however, the court considers the titleholder to be a constructive trustee of the assets or property, with the intended result that the titleholder transfer the assets to their proper owners.  An essential element of proving a constructive trust in court is that the titleholder has actual title to the property, not just possession of the property, or a mere appearance of ownership.  There generally must be clear and convincing evidence of title in the alleged constructive trustee in order to prove that a constructive trust exists.

Help with a Constructive Trust

If you are in the position of being required to prove that a constructive trust exists, you should contact an attorney for advice and representation before the probate court.  Given the relatively high standard of proof in constructive trust cases, you should always rely on your attorney’s judgment in deciding whether to invest the time and money in what may be a protracted, costly, and perhaps unsuccessful legal proceeding.