Legal Memorandum: Requirements of a Constructive Trust

Issue: What must a party demonstrate in order to obtain a constructive trust?

Area of Law: Estate Planning & Probate
Keywords: Constructive trust; Property interest
Jurisdiction: Alabama
Cited Cases: 134 N.J. Super. 466; 981 P.2d 219; 452 A.2d 148; 409 S.E.2d 148; 978 S.W.2d 786; 901 A.2d 428; 243 N.J. Super. 97; 152 N.J. Super. 569; 921 A.2d 427; 913 A.2d 570; 175 N.J. 597; 734 A.2d 1117; 198 N.J. Super. 255
Cited Statutes: None
Date: 07/01/2007

A constructive trust is a device used to compel one who unfairly holds a property interest to convey that interest to another, to whom it justly belongs.  See George Gleason Bogert, George Taylor Bogert, & Amy Morris Hess, The Law of Trusts and Trustees § 471 (Rev. 2d ed. 2006).  When the court finds that the defendant is the holder of a property interest that he retains as a result of unjust, unconscionable, or unlawful means, it will take such interest from the defendant and vest it in the wronged party.  Id.  Often, this is accomplished by issuing an order that the defendant convey the subject property to the plaintiff.  Id. 

In granting the remedy of a constructive trust, the court gives expression to the idea that the defendant has been under an equitable duty to give the plaintiff the benefit of the property ever since the defendant began to hold it unjustly; that is, the defendant is in the same position as if he had been an express trustee of the property for the plaintiff.  Id.  Thus, the rights and duties of the parties are the same as if the defendant had been, from the beginning of his inequitable holding, an express trustee for the plaintiff.  Id.

Again, the Third Circuit state courts are in accord with the learned treatise.  In New Jersey, for example, courts have stated that a constructive trust is an equitable device that will be imposed when a person has […]

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