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A trust is a legal relationship where one person, the trustee, holds assets for the benefit of another person, a beneficiary. Image File history File links Broom_icon. ...
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Lady Justice or Justitia is a personification of the moral force that underlies the legal system (particularly in Western art). ...
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This article concerns the common-law legal system, as contrasted with the civil law legal system; for other meanings of the term, within the field of law, see common law (disambiguation). ...
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A holographic will is a will and testament that has been entirely handwritten and signed by the testator. ...
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A will contract is a term used in the law of wills describing a contract to exchange a current performance for a future bequest. ...
A codicil is a document that amends, rather than replaces, a previously executed will. ...
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In the statutory law of wills and trusts, an attestation clause is a clause that is typically appended to a will, often just below the place of the testators signature. ...
A residuary estate, in the law of wills, is any portion of the testators estate that is not specifically devised to someone in the will, or any property that is part of such a specific devise that fails. ...
Incorporation by reference is a doctrine of the common law of wills by which a person may state in his will that certain property is to be disposed of by a seperate document, describing the place where the document will be found. ...
A will contest, in the law of property, is a formal objection raised against the validity of a will, based on the contention that the will does not reflect the actual intent of the testator (the party who made the will). ...
In the common law tradition, testamentary capacity is the legal term of art used to describe a persons legal and mental ability to make a valid will. ...
Undue influence (as a term in jurisprudence) is an equitable doctrine that involves one person taking advantage of a position of power over another person. ...
An insane delusion is the legal term of art in the common law tradition used to describe a false conception of reality that a testator of a will adheres to against all reason and evidence to the contrary. ...
Lapse and anti-lapse are complementary concepts under the law of wills, which address the disposition of property that is willed to someone who dies before the testator (the writer of the will). ...
Ademption is a term used in the law of wills to determine what happens when property bequested under a will is no longer in the testators estate when the testator dies. ...
Abatement (derived through the French abattre, from the Late Latin battere, to beat), a beating down or diminishing or doing away with; a term used especially in various legal phrases. ...
The doctrine of acts of independent significance, in the common law of wills, permits the testator to effectively change the disposition of her property without changed her will, if acts or events with relation to the property itself have some significance beyond avoiding the requirements of the will. ...
An elective share is a term used in American law relating to inheritance, which describes a proportion of an estate which the surviving spouse of the deceased may claim in place of what they were left in the decedents will. ...
A pretermitted heir is a term used in the law of property to describe a person who would likely stand to inherit under a will, except that the testator (the person who wrote the will) did not know or did not know of the party at the time the will...
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Where property is passed to a person but no gift is made, it is held for the owner, this is the Resulting trust; where property should for some reason of public policy or fairness or rule of Equity be held for someone other than the legal owner, this is either...
A resulting trust is a type of implied trust created through implication of law where the actions of the parties involved and the nature of the transaction implies an intention to create a trust. ...
A bare trust is one in which the beneficiary has a right to both income and capital and may call for both to be remitted into their own name, they are also entitled to take actual ownership and control of the trust property. ...
A discretionary trust[1] is a trust where the beneficiaries and/or their entitlements to the trust fund are not fixed, but are determined by the criteria set out in the trust instrument by the settlor. ...
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An interest in possession trust is the most common example of a life interest trust. ...
A charitable trust is a trust established for charitable purposes. ...
A purpose trust is a kind of trust which has no beneficiaries, but instead exists for advancing some non-charitable purpose of some kind. ...
The Protective Trust is a form of settlement found in England and Wales and several Commonwealth countries. ...
A spendthrift trust is a trust that is created for the benefit of a person who is in debt (often because they are unable to control their spending) that gives an independent trustee full authority to make decisions as to how the trust funds may be spent for the benefit...
In the U.S., proper ownership of life insurance is important if the insurance proceeds are to escape federal estate taxation. ...
An honorary trust, under the law of trusts, is a device by which a person establishes a trust for which there is neither a charitable purpose, nor a private beneficiary to enforce the trust. ...
An asset-protection trust is a term which covers a wide spectrum of legal structures. ...
Special Needs Trusts are created to ensure that beneficiaries who are developmentally disabled or mentally ill can receive inheritances without losing access to essential government benefits. ...
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In common law legal systems, a trust is a contractual relationship in which a person or entity (the trustee) has legal title to certain property (the trust property or trust corpus), but is bound by a fiduciary duty to exercise that legal control for the benefit of one or more...
A pour-over will is a testamentary device wherein the writer of a will creates a trust, and decrees in the will that the property in his estate at the time of his death shall be placed in the trust. ...
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A living will, also called will to live, advance health directive, or advance health care directive, is a specific type of power of attorney or health care proxy or advance directive. ...
Intestacy is the condition of the estate of a person who dies owning property greater than the sum of his or her enforceable debts and funeral expenses without having made a valid will or other binding declaration; alternatively where such a will or declaration has been made, but only applies...
A testator is a person who has made a legally binding will or testament, which specifies what is to be done with that persons penis family and/or property after death. ...
Probate is the legal process of settling the estate of a deceased person; specifically, resolving all claims and distributing the decedents property. ...
A power of appointment is a term most frequently used in the law of wills to describe the ability of the testator (the person writing the will) to select a person who will be given the authority to dispose of certain property under the will. ...
Simultaneous death is a problem of inheritence which occurs when two people (usually a husband and wife) die at the same time in an accident. ...
The slayer rule, in the common law of inheritance, is a doctrine that prohibits inheritence by a person who murders someone from whom they stand to inherit. ...
Disclaimer of interest (also called a renunciation), in the law of inheritance, wills and trusts, is a term that describes an attempt by a person to renounce their legal right to benefit from an inheritance (either under a will or through intestacy) or through a trust. ...
A contract is any promise or set of promises made by one party to another for the breach of which the law provides a remedy. ...
In the common law, a tort is a civil wrong for which the law provides a remedy. ...
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Criminal law (also known as penal law) is the body of statutory and common law that deals with crime and the legal punishment of criminal offenses. ...
The law of evidence governs the use of testimony (e. ...
Look up trust in Wiktionary, the free dictionary. ...
The word trustee is a legal term that refers to a holder of property on behalf of a beneficiary. ...
A beneficiary in the broadest sense is a natural person or other legal entity who receives money or other benefits from a benefactor. ...
A constructive trust is one type of trust. Instead of being created expressly and intentionally by a settlor, a constructive trust arises by operation of law as a response to certain events. In law a settlor is a person who settles property on express trust for the benefit of beneficiaries. ...
For example, if I steal your car and trade it for a motorbike, I will obtain legal title to the motorbike. However, if you sue me, the court will say that I hold the motorbike on constructive trust for you, i.e. for your benefit.
Events generating constructive trusts - Wrongs: This constructive trust the defendant breaches a duty owed to the claimant. The most common such breach is a breach of fiduciary duty. A fiduciary duty is a duty of loyalty and trust owed in various situations. Where a fiduciary makes a profit in breach of that duty, usually by using privileged information or diverting a profit making opportunity to himself instead of the person to whom the duty is owed, the profit is held on constructive trust for the person to whom the duty is owed. Examples include Boardman v Phipps [1967] 2 AC 46 and Regal (Hastings) v Gulliver [1967] 2 AC 134. A controversial example is the case of Attorney-General for Hong Kong v Reid [1994] 1 AC 324, in which a senior prosecutor took bribes not to prosecute certain offenders. With the bribe money, he purchased property in New Zealand. His employer, the Attorney-General, sought a declaration that the property was held on constructive trust for it, on the basis of breach of fiduciary duty. The Privy Council awarded a constructive trust. The case is different from Regal (Hastings) because there was no interference with a profit-making opportunity that properly belonged to the prosecutor. This area is highly controversial and may not represent the law in England because of the previous Court of Appeal case of Lister v Stubbs (1890) 45 Ch D 1, which held the opposite, partially because a trust is a very strong remedy that gives proprietary rights to the plaintiff not enjoyed by the defendant's other creditors. In the event of the defendant's insolvency, the trust assets are untouchable by the general creditors. Supporters of Lister v Stubbs suggest that there is no good reason to put the victim of wrongdoing ahead of other creditors of the estate. However, Reid's case represents the most recent thinking of the highest court of appeal in the British Commonwealth.
- Interference with the plaintiff's property: in Foskett v McKeown a trustee used trust money together with some of his own money to purchase a life insurance policy. Then he committed suicide. The insurance company paid out to his family. The defrauded beneficiaries of the trust sought a declaration that the proceeds were held on constructive trust for them. The House of Lords said that the beneficiaries could choose between either: (a) a constructive trust over the proceeds for the proportion of the life insurance payout purchased with their money; or (b) an equitable lien over the fund for the repayment of that amount. There is controversy as to what the true basis is of this trust. The House of Lords said that it was to vindicate the plaintiffs' original proprietary rights. However, this reasoning has been criticized as tautologous by numerous scholars who suggest the better basis is unjust enrichment (see below). This is because there must be a reason why a new property right is created (i.e. the trust) and that must be because otherwise the family would be unjustly enriched by receiving the proceeds of the insurance policy purchased with the beneficiaries' money. "Interference with the plaintiff's property" can justify why the plaintiff can get it's property back from a thief, but it cannot explain why new rights are generated in property for which the plaintiff's original property is swapped. In Foskett v McKeown, the plaintiff's original property was an interest in the trust fund. The remedy they obtained was a constructive trust over an insurance payout. It is not obvious why such a new right should be awarded without saying it is to reverse the family's unjust enrichment.
- Unjust enrichment: a constructive trust may rise for the benefit of a person who paid an undue amount of money to another; that person who received the money will be regarded as a trustee detaining that money for the benefit of the one who payed it. In Chase Manhattan Bank v Israel British Bank, one bank paid another bank a large sum of money by mistake (note that the reipient Bank did not do anything wrong - it just received money not owing to it). Goulding J held that the money was held on (constructive) trust for the first bank. The reasoning in this case has been doubted, and in Westdeutsche Landesbank Girozentrale v Islington London Borough Council the House of Lords distanced itself from the idea that unjust enrichment raises trusts in the claimant's favour. This remains an area of intense controversy. These type of trusts are called "institutional" constructive trusts. They arise the moment the relevant conduct (breach of duty, unjust enrichment etc) occurs. They can be contrasted with "remedial" constructive trusts, which arise on the date of judgment as a remedy awarded by the court to do justice in the particular case. An example is the Australian case Muschinski v Dodds (1986) 160 CLR 583. A de facto couple lived in a house owned by the man. They agreed to make improvements to the property by building a pottery shed for the woman to do arts and crafts work in. The woman paid for part of this. They then broke up. The High Court held that the man held the property on constructive trust for himself and the woman in the proportions in which they had contributed to the improvements to the land. This trust did not arise the moment the woman commenced improvements - that conduct did not involve a breach of duty or an unjust enrichment etc. The trust arose at the date of judgment, to do justice in the case. Remedial constructive trusts do not exist in England, and the High Court of Australia has also distanced itself from Muschinski v Dodds in the later case of Bathurst City Council v PWC Properties (1998) 195 CLR 566
A defendant or defender is any party who is required to answer the complaint of a plaintiff or pursuer in a civil lawsuit before a court, or any party who has been formally charged or accused of violating a criminal statute. ...
A fiduciary is a person who occupies a position of trust in relation to someone else such that he is required to act for the latters benefit within the scope of that relationship. ...
In most common law jurisdictions, the Attorney General or Attorney-General is the main legal adviser to the government, and in some jurisdictions may in addition have executive responsibility for law enforcement or responsibility for public prosecutions. ...
A privy council is a body that advises the head of state of a nation, especially in a monarchy. ...
Court of Appeals is the title of certain appellate courts in various jurisdictions. ...
This article needs additional references or sources for verification. ...
Life insurance or life assurance is a contract between the policy owner and the insurer, where the insurer agrees to pay a sum of money upon the occurrence of the policy owners death. ...
The House of Lords is the upper house of the Parliament of the United Kingdom and is also commonly referred to as the Lords. The Sovereign, the House of Commons (which is the lower house of Parliament and referred to as the Commons), and the Lords together comprise the Parliament. ...
A constructive trust is a legal device used by courts sitting in equity to resolve claims raised by a plaintiff whose property has been converted to a profitable use by the defendant. ...
The following analysis is based on English law. ...
De facto is a Latin expression that means in fact or in practice. It is commonly used as opposed to de jure (meaning by law) when referring to matters of law or governance or technique (such as standards), that are found in the common experience as created or developed without...
High Court entrance The High Court of Australia is the final court of appeal in Australia, the highest court in the Australian court hierarchy. ...
Motto (French) God and my right Anthem No official anthem - the United Kingdom anthem God Save the Queen is commonly used England() – on the European continent() – in the United Kingdom() Capital (and largest city) London (de facto) Official languages English (de facto)1 Unified - by Athelstan 927 AD Area - Total...
The usefulness of constructive trusts For example, if the defendant steals $100,000 from the plaintiff and uses that money to buy a house, the court can trace the house back to the plaintiff's money, and can deem the house to be held in trust for the plaintiff; the defendant must then convey title to the house to the plaintiff - even if rising property values had appreciated the value of the house to $120,000 by the time the transaction occurred. If the value of the house had instead depreciated to $80,000, the plaintiff could demand a remedy at law (money damages equal to the amount stolen) instead of an equitable remedy.
The situation would be different if the defendant had mixed his own property with that of the plaintiff, for example, adding $50,000 of his own money to the $100,000 stolen from the plaintiff and buying a $150,000 house; or using plaintiff's $100,000 to add a room to defendant's existing house. The constructive trust would still be available, but in the proportions of the contributions, not wholly in the claimant's favour. Alternatively, the claimant could elect for an equitable lien instead, which is like a mortgage over the asset to secure repayment.
Because a constructive trust is an equitable device, the defendant can raise all of the available equitable defenses against it - including unclean hands, laches, detrimental reliance, and undue hardship. For the actors guilds called equity, see Actors Equity Association (U.S.) or British Actors Equity Association (U.K.). For equity as the value of an ownership interest in property, see ownership equity. ...
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Laches is an equitable defense, or doctrine, in an action at law. ...
Estoppel is a concept that prevents a party from acting in a certain way because it is not equitable to do so. ...
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