Charles E. Rounds Jr., of Suffolk University Law School, has made available for download his article, “A message to the Divorce Bar: The constructive trust and the resulting trust are creatures of and regulated by general principles of equity, not the Uniform Trust Code”, published in JDSUPRA. The abstract is as follows:
The constructive trust is a tool developed by equity to assist the judiciary in temporarily securing property that is the source of someone’s unjust enrichment, pending transfer of the property to its rightful owner. One who procures property by fraud, duress, or undue influence, or acquires it due to mistake is unjustly enriched. One who acquires property by virtue of someone else’s fraud, duress, undue influence, or mistake also is unjustly enriched, unless he is a BFP.
The judicial imposition of a resulting trust, on the other hand, facilitates the return of legal title from the purported trustee of a trust that has failed ab initio back to the would-be settlor. In the case of a failure in mid-course, the express trustee morphs into a resulting trustee charged with returning legal title to the settlor, reversionary interests, whether legal or equitable, always being vested.
The constructive trust and the resulting trust are said to be “involuntary” trusteeships. As we discuss in the material featured in the appendix immediately below, sometimes it is not all that clear whether the constructive trust or the resulting trust is the appropriate procedural equitable remedy, especially when it comes to innocent unjust enrichment.
Click here to view Charles E. Rounds Jr.’s summary of “A message to the Divorce Bar: The constructive trust and the resulting trust are creatures of and regulated by general principles of equity, not the Uniform Trust Code”
Posted by Marin Larkin, Associate Editor, Wealth Strategies Journal.