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Huntsville, AL 35802

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Estate Planning Newsletter

Remedy for Unjust Obtainment 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.

  • Responsibilities 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.
  • Wills & The Effects of Homicide
    If a person murders a relative, is he/she entitled to receive any of the victim’s property? In most cases, the answer would be “no.” Usually, a convicted killer cannot inherit a victim’s property, even if he/she... Read more.
  • Life Insurance Uses
    There are numerous uses for life insurance. Some are obvious; others are very creative. Some of the most common uses include paying estate taxes, estate administration, inheritance equalizing and many others. Estate Taxes... Read more.
  • Estate Tax Valuation Methods for Securities
    In 2001, Congress passed legislation incrementally increasing the amount exempt from federal estate taxes and completely eliminating estate taxes in the year 2010. However, the legislation contains a “sunset” provision... Read more.
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