Constructive Trusts in New York
Long Island Constructive Trust Attorney
An Overview of New York Constructive Trusts
A constructive trust an a type of case that is used to establish ownership in an asset that is held by another. The most common situations where a constructive trust is appropriate is as follows:
- Oral Agreement. An oral agreement between people who are close enough where a written contract is likely not to be used. This agreement normally says the property of one person will be held by the other one in name only. The agreement itself can be implied.
- A breach of fiduciary duty. If someone is entrusted to hold property in their name as a fiduciary and takes advantage of that position, one remedy is to impose a constructive trust over the property. Note that putative damages may also be awarded when there is a breach of fiduciary duty.
- Fraud. When the property is acquired by fraud, the court can impose a constructive trust in the favor of the true owner.
- Unjust enrichment. When someone is unjustly enriched at the expense of another, a constructive trust may be imposed, even if there was no fraud or bad intent.
Constructive trusts are an equitable remedy designed to give relief when other remedies may not be available.
At the Law Office of J. Douglas Barics we have the experience at both the trial and appellate level to successfully represent you in any constructive trust case.
What you need to know about Constructive Trusts
What is a constructive trust?
A constructive trust is an equitable remedy that is created by the court when there isn't an existing trust in writing. The basis for imposing a constructive trust results from the actions of the parties showing that a trust was created but was not put in writing due to the close relationship between them, and is designed to prevent one party from exploiting that close relationship for financial advantage.
Why is a constructive trust needed?
A constructive trust is needed when someone has obtained title to property when he or she should not have, resulting in that person becoming unjustly enriched. When a court imposes a constructive trust, it can only return property to the rightful owner who was deprived of their interest. It cannot create a new property right.
How is a constructive trust created?
A constructive trust is created by the court.
In order to have the court impose a constructive trust, the following elements must be proven.
-
- A confidential or fiduciary relation between the parties
- A promise
- A transfer in reliance of that promise
- Unjust enrichment arising from not keeping the promise
What is an example of a constructive trust?
An example of a constructive trust would occur when a romantic partner wants to buy a house. This partner has the money and income but lacks sufficient credit to obtain a mortgage. After speaking with their partner who lacks the money but does have the credit rating, they decide to place the house in the second partner's name. The first partner makes all or some of the payments. Years later, the second partner decides to keep the house despite the informal agreement. All elements are met.
-
- There is a close or fiduciary relationship
- There is a transfer made due to a promise
- There is a breaking of that promise
- The second partner would be unjustly enriched
Because constructive trusts are equitable in nature, the elements are not hard and fast, and each case will be determined on its own unique facts.
Constructive trusts are not easy to win. There are specific legal elements that must be established, and they are designed to cure a very specific set of circumstances.
But if correct circumstances apply, a constructive trust can be an invaluable tool in protecting a true owner's rights due to the flexible nature of the constructive trust.
Can a constructive trust be part of a divorce?
Constructive Trusts may be part of the pleadings in a contested divorce, contested annulment, or any matrimonial action and listed as a separate cause of action. This approach is appropriate when the asset was acquired prior to the marriage or if the status of the marriage is in question as concurrent relief, since equitable distribution is still authorized in a void marriage. When there is no marriage between the parties but there is still a close relationship, a completely separate case for only the imposition of a constructive trust may be maintained.
The need for a constructive trust is more common in same sex divorces since many long term partners did not have the option to get married early on.
Contact Our Constructive Trust Attorney Today
At the Law Office of J. Douglas Barics, we have the skills and knowledge to prosecute or defend any constructive trust action, no matter how challenging or complex. With over 20 years of experience in handling constructive trust cases, we can bring to you the services of a large firm at a fraction of the cost. When you need a skilled constructive trust lawyer located in Suffolk County, call The Law Office of J. Douglas Barics.
For a free phone case consultation or to schedule an office meeting, call 631-864-2600.