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What is a constructive trust?

Building an effective estate plan is an important part of providing for the ones you love with your resources. However, in some cases, even those who fail to create an estate plan during their lifetimes may end up with their resources placed into a constructive trust upon passing away. Constructive trusts are a certain kind of trust that arises when a court acknowledges the rights of an heir despite the absence of an established trust at the time of a benefactor's death.

Should the court examine the circumstances surrounding the death of a benefactor and find that he or she intended to create a trust to provide for beneficiaries, the court may choose to create a trust to meet those intentions. This may take a number of forms, depending on the court's perspective on just what the decedent intended to happen with his or her resources.

Because a constructive trust is an implied trust, the court does its best to construct a trust that represents what it believes the decedent intended rather than make value judgments on what should happen with the underlying resources. This may mean that a court constructs a trust that some heir or another finds unfair and frustrating.

If you have concerns about the state of your loved one's estate plan, or if you believe that your recently deceased loved one intended to create a trust of some kind, an experienced estate planning attorney can provide clear guidance. Professional estate planning counsel can help you examine your circumstances and create a well-rounded solution to your estate planning needs.

Source: Findlaw, "Types of Trusts," accessed Dec. 22, 2017

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