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Courts can create constructive trusts

Many posts on this blog have discussed different legal tools that individuals in New Jersey may use to create comprehensive estate plans. From personal wills to powers of attorney documents, different tools can serve different important functions in a person's unique estate plan. Trusts can be very helpful for people who hope to protect their estate's wealth from the costs associated with the probate process, and to see that their assets will be handed down per their wishes after their death.

However, from time to time a person may intend to create a trust but not fully meet all of the requirements to establish it before his or her death. Whether his or her life ends while the trust is being created or he or she unintentionally misses one of the required elements of making a trust in New Jersey, an estate planner may think that he has a trust in place when he does not. If a court is able to determine that an estate planner meant to create a trust but failed to do so, that court may establish a constructive trust.

A constructive trust is one that is implied from the intentions of the decedent. Through actions and other estate planning devices it may appear that the estate planner meant to provide a particular beneficiary with some property. If it appears that a trust was meant to be created but it fails in some way, a court can establish it to fulfill the intentions of the deceased party.

Whether a court will establish a constructive trust will depend on the circumstances of a particular case. Readers of this post are encouraged to speak with their legal counsel about whether constructive trusts could be established based on the facts of their situations. No outcome can be guaranteed when it comes to estate planning or any other legal matter, and this post is only intended to introduce the topic of constructive trusts to interested readers.

Source: FindLaw, "Types of Trusts," accessed April 19, 2016

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