Constructive Trusts

What Is A Trust?

A trust is an agreement for a person or entity to hold an asset, or assets, for the benefit of another. A trustee can hold almost any type of property, such as real property or money, on trust.

A Trust Deed or other written document will usually detail the trust between the parties. As such, the beneficiaries and trustee's obligations will be set out in express terms. This results in an "express trust".

What Is A Constructive Trust?

A "constructive trust" exists where there is an implied agreement. Constructive trusts arise from the parties' conduct rather than express agreement. Various situations might result in the construction of a trust.

A Court can award a constructive trust as a remedy where a party has benefited to the detriment of another. In this case, the Court would hold the party who obtained the benefit in bad faith to be the trustee. The party who should receive a remedial benefit would become the beneficiary.