Constructive trust is a legal doctrine that permits courts to compel a person to make restitution to someone else when that person has unjustly obtained or retained funds or property. In other words, it allows a party to receive back property wrongfully taken by another, without necessarily having to prove fraud or wrongful conduct.
Constructive trusts are often used in cases where fraud, misrepresentation, or unjust enrichment have occurred. These trusts also help senior citizens, disabled persons, and other vulnerable individuals to protect their rights, when those rights could have otherwise been taken advantage of.
Examples of Constructive Trusts
For example, consider a situation in which an elderly woman has loaned her granddaughter money to start a small business. After taking the money, the business venture falls through and the granddaughter is left unable to pay back the money. In this case, the grandmother could invoke a constructive trust to get restitution for the money loaned.
Another example involves a property dispute between two siblings. One sibling wrongfully assumed ownership of a shared piece of property, and the other sibling took steps to reclaim it. A constructive trust was established in the court order, which allowed the wrongfully displaced sibling to receive back the property.
Why Is Constructive Trust Important?
Constructive trusts can provide valuable legal remedies to those who have been wronged. They are often used in cases involving vulnerable populations to ensure that all deserving parties receive restitution. When used in conjunction with existing evidence and legal procedures, they can be an effective way to ensure justice is served.