Constructive Trust

Question 1

CONSTRUCTIVE TRUSTS

Answer 1

A constructive trust is not really a trust but rather is a flexible equitable remedy to prevent unjust enrichment resulting from wrongful conduct, such as fraud, undue influence, or breach of a fiduciary duty. Equity turns the holder of legal title into a trustee when they may not in good conscience retain the beneficial interest in the property. The constructive trustee’s only duty is to convey the property to the person who would have owned it but for the wrongful conduct

Question 2

Must Be Requested

Answer 2

A constructive trust must be requested as a remedy in a court action. A constructive trust is not automatic; it must be pled and proved. Proof of the facts necessary to establish a constructive trust must be made by clear and convincing evidence rather than a preponderance of the evidence in some states.

Question 3

Requires Particular Property

Answer 3

For a constructive trust remedy, the plaintiff must be able to identify particular property as the trust res. The mere proof that a defendant has been guilty of wrongdoing against the plaintiff and that the
defendant has assets that could be used to satisfy the plaintiff’s claim is not a sufficient basis for imposing a constructive trust.