Perhaps in its most simple definition, a constructive trust is an equitable remedy used by the courts to prevent someone from being unjustly enriched. In a commonly seen scenario, a parent transfers a parcel of property to a child with the understanding that the parent can continue to reside there for the rest of their life. After the transfer is complete, the child decides to sell the property from under the parent or tries to evict them to collect rents. The constructive trust is employed in these situations to prevent the child from achieving their goals at the expense of (and in breach of the previous promise to) the parent. According to the Court of Appeals, the constructive trust is “the formula through which the conscience of equity finds expression. Where property has been acquired in such circumstances that the holder of legal title may not in good conscience retain the beneficial interest, equity converts him into a trustee” ( Beatty v Guggenheim Exploration Co., 225 NY 380, 386 ).
Generally, the following elements must be established to state a claim for this type of relief: (1) a confidential or fiduciary relation (2) a promise (3) a transfer in reliance thereon and (4) unjust enrichment ( see Sharp v Kosmalski, 40 NY2d 119, 121 ). Nonetheless, unlike most causes of action, courts do not require strict satisfaction of each element, but rather use them more as flexible considerations ( Lester v Zimmer, 147 AD2d 340, 341 [3d Dept 1989]).
Courts most often impose constructive trusts where traditional remedies prove inadequate or unavailable.
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If you believe any of these circumstances apply to your specific situation, it is critical that you act quickly and discuss your case with an experienced New York attorney. With a thorough understanding of litigation, our firm can answer your questions and provide the legal guidance you need.
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