When Are Constructive Trusts Created by Florida Judges?

Posted By on June 10, 2014

In Florida, a constructive trust is a legal remedy that judges use to help people who have been harmed in all sorts of situations, including in probate controversies, divorce cases and with business torts like tortious interference with a business relationship. Said another way, constructive trusts are used to thwart a wrongdoer who has taken advantage of a confidential relationship they have with a victim to gain an unfair advantage over the victim and gain possession or ownership of the victim’s property.

For example, in a probate setting, a wrongdoer may have exerted undue influence over a decedent to gain ownership of the decedent’s homestead requiring a Florida probate judge to hold that a constructive trust exists in order to remedy the improper transfer. In divorce proceedings, a constructive trust may be used for property that is now held unjustly by one spouse that was originally owned by the other spouse. For business deals that end up being fraudulent or unconscionable, business assets can be determined to be held in a constructive trust as a remedy to a civil lawsuit.

Bottom line, a constructive trust is created by judicial action and courtroom advocacy. The judge finds that the property at issue is in a legal trust, with the judge formally making this ruling by order or judgment. It is through this construction that the judge can move ownership of that property back to the victim when, for example, a wrongdoer refuses to sign a deed, transfer the asset, etc.

Constructive Trusts Require a Courtroom

Accordingly, the only way for a constructive trust to exist in Florida is for a Florida judge to be involved – and depending on the type of case it is, a judge can order this relief in an evidentiary proceeding and not just during a full blown trial (for example, in a divorce case).

To prove a constructive trust exists in Florida, a victim must show the following by clear and convincing evidence (a high legal standard):

  1. A promise, either expressed or implied
  2. Transfer of the property and reliance thereon
  3. A confidential relationship
  4. Unjust enrichment.

It’s important to remember that any request for relief in the form of a constructive trust must have a specific piece of property in mind. No one how badly the defendant has acted, you are not able to have a “constructive trust” placed upon the land or personal property of the wrongdoer, in an “umbrella” fashion. The trust can only be imposed upon a target — a house, a bank account — i.e., a tangible asset of some sort that has unjustly enriched the defendant in some way.

Many are confused by this requirement, especially where money is concerned. However, in probate controversies or divorce cases or tortious interference situations involving businesses, money damages from the defendant are the primary type of judicial relief that the judge will consider. It is only when specific property (including specific funds) is in dispute that a constructive trust can be imposed as a remedy.

Examples of property where constructive trusts have been imposed by Florida judges include:

  • Life insurance proceeds (Holmes by Holmes v Holmes, 463 So.2d 578 (Fla. 1st DCA 2010)
  • Residue of testator’s estate (In re Estate of Tolin, 622 So. 988 (Fla. 1993)
  • Survivorship account at a bank (Logie v. J.P. Morgan, 716 So. 2d 319 (Fla. 4th DCA 1998)
  • Real estate (Williams v. Grogan, 100 So.2d 407 (Fla. 1958).

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