Estate Planning Newsletter

• Formal Requirements of Wills & Witnesses
  A witnessed will is only one of several different types of wills. It is also referred to as a “formal” or “attested” will, and involves the eyewitness participation of other... Read more.
• The Passing of Assets to Named Beneficiaries from a Totten Trust
  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.
• Life Insurance Benefits
  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.
• The Implications of Reproductive Technology on Survivors' Benefits
  Several states refer to children who are born or adopted after the execution of a parent’s will and omitted from the provisions of the testamentary instrument as “omitted” or “pretermitted” children. In the... Read more.

• Survey finds many need to work on estate planning
• IRS says Prince’s estate undervalued by 50%, triggering another dispute in settlement
• How To Talk to Your Parents About Their Estate Plan (Without Making It Awkward)
• Do-It-Yourself Estate Planning Mistakes
• Year-End Tax Planning Tips For 2020

Transferring Property to its Rightful Owner

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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