Constructive trust

In trust law, a constructive trust is an equitable remedy imposed by a court to benefit a party that has been wrongfully deprived of its rights due to either a person obtaining or holding a legal property right which they should not possess due to unjust enrichment or interference, or due to a breach of fiduciary duty, which is intercausative with unjust enrichment and/or property interference.[1][2] It is a type of implied trust (i.e., it is created by conduct, not explicitly by a settlor).

In the United States (in contrast to England), a constructive trust remedy generally does not recognize or create any continuing fiduciary relationship — that is, a constructive trust is not actually a trust except in name. Rather, it is a fiction declaring that the plaintiff has equitable title to the property at issue, and ordering the defendant to transfer legal ownership and possession to the plaintiff.[3] For instance, in some states the slayer rule is implemented in the form of a constructive trust.

  1. ^ Restitution, Law School Help, Retrieved on May 12, 2008.
  2. ^ Virgo, Graham (2006). The Principles of the Law of Restitution 2nd edn. Oxford Clarendon Press. pp. 606–607.
  3. ^ Restatement (Third) of Restitution and Unjust Enrichment § 55 cmt. b (2010) (“[E]very judicial order recognizing that ‘B holds X in constructive trust for A’ may be seen to comprise, in effect, two remedial components. The first of these is a declaration that B’s legal title to X is subject to A’s superior equitable claim. The second is a mandatory injunction directing B to surrender X to A or to take equivalent steps.”).

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