Implied Trusts Under Florida Law
Most people who may recognize a trust as an estate planning tool that can help then provide for their beneficiaries after their death. However, not all trusts are used in this way, and one such trust is a constructive trust.
A constructive trust is not actually a trust under the general definition of a trust. A constructive trust is a judicial creation, an implied trust that a court creates in order to provide protections for a person who has been deprived of a right in some way. A constructive trust is not created by an individual with the express purpose or intent to pass on some property to another person.
Constructive trusts are slightly different from resulting trusts, which are trusts that can arise when an express trust fails but the intent of the testator in creating the failed express trust is still fulfilled. Resulting trusts arise also created by operation of law and not by the express actions of one person. With a resulting trust, the person who holds property that is found to rightfully belong to another person is said to be holding it in trust for the rightful owner.
In a probate proceeding involving allegations that a person received property from the deceased through fraud and undue influence, the court can use a constructive trust to protect the rightful beneficiaries from losing out on the property they should rightfully have.
Courts generally impose a constructive trust over contested assets if there is a reason to believe that the assets will be spent or misused before the case is resolved. However, courts can impose constructive trusts even without a fear of misuse if the court finds the use of a constructive trust appropriate. While courts may impose the constructive trust when one of the parties to a case requests it and offers adequate evidence of the trust’s necessity, the court can also make a decision to impose the trust on its own motion.
Constructive trusts are not permanent, and generally do not make disbursements to the person for which the property is held in trust. The property is usually released to that person at the conclusion of the case. The person can use the property that was held in the trust for his or her own use without restriction. This is another way in which a constructive trust differs from a traditional trust set up by a testator.
There are ways in which a testator can set up his estate in order to avoid the possibility of a court imposing a constructive trust, for example if a gift fails and it is unclear which person should get it. However, it is not possible to foresee every instance in which a court may find a constructive trust appropriate in an estate dispute. People can take care when making gifts during their lifetimes, when writing wills, and when establishing trusts in order to avoid challenges to their estate plan based on fraud and undue influence.
Contact an Experienced Estate Planning Attorney
To learn more about trusts in Florida, and how you can use one along with other estate planning instruments to pass assets to your heirs, call an experienced estate planning attorney from the Millhorn Elder Law Planning Group located in The Villages, Florida.