Using Constructive Trusts in Probate Court

In a traditional trust, no matter what kind it is, property is often held by the trust, and managed by a trustee, for the benefit of whomever is supposed to benefit from the trust proceeds or assets.

What About Constructive Trusts

But unlike those kinds of trusts, which are purposely created by the creator or settlor of the trust, constructive trusts are a different animal. Constructive trusts are trusts created by judges, in certain kinds of cases including in probate court cases.

A constructive trust is created by a judge, and it essentially says that the property at issue is now being held by the court, and being kept separate from other property and kept safely, pending the outcome of litigation concerning that specific property.

How and When They are Used

Constructive trusts are ideal when there is some specific, identifiable item or property, and a party wants it held onto, preserved, or protected, to make sure it’s still all there, and intact, once the lawsuit (or probate court case) actually ends.

Constructive trusts are ideal in probate court cases, because in probate, people are often fighting over items or pieces of property, such as in a will contest, and it is important that the property be maintained and protected if someone else is in possession of, or has access to, the property–such as someone that the parties allege came into possession of the property wrongfully.

Because one goal of a constructive trust is to prevent unjust enrichment, it is well suited for things kike undue influence claims, where family members or beneficiaries may claim that someone gained a unfair advantage or was enriched, because of fraud, coercion or undue influence over the deceased.

To get a constructive trust, the party asking for it must show that there is some specific piece of property. You cannot, for example, have a constructive trust placed on all of someone’s assets, or even on an amount of money.

The thing being placed in the constructive trust must be easily identifiable and specific. Examples of property, often in dispute in probate cases, which may be the subject of a constructive trust, might include things like real estate, or a business, or a specifically named bank account, or proceeds from life insurance or an annuity.

Managing the Property in Trust

Because the court essentially takes control of the property in the constructive trust, often, parameters will be placed on managing it, if necessary.

Something like a bank account or life insurance proceeds, which is static, may need no maintenance, whereas a home or a business may have to have people to pay bills related to it, or manage it properly. These expenses sometimes may have to come out of the proceeds of the estate.

A constructive trust may be able to help you in your probate or undue influence case. Call the West Palm Beach probate lawyers at The Law Offices of Larry E. Bray today for help.

Source:

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