Achieving Justice Through a Constructive Trust in Queens, NY

The written laws of the United States exist to deliver justice. Unfortunately, in some situations, one party may act in a way that is technically legal, but clearly unfair. In those cases where state or federal statutes do not provide a remedy for the injured party, equitable remedies such as “constructive trust” may be the only recourse. Equitable remedies are those which are in the discretion of a court to right a wrong that has been done to one party and prevent the other party from being unjustly enriched.

The Law Offices of Andreas Vasilatos, PLLC represents clients in constructive trust matters in New York, creating a path to justice where statutory law does not provide one.

What is a Constructive Trust?

A constructive trust is not a written document like trusts used in estate planning. Instead, it is a legal relationship that arises when one party legally holds property that it would be inequitable for them to retain against another party’s interests.

For example, imagine that two sisters, Ann and Betty, own a business together. When Ann discovers she has a terminal illness, she decides to transfer her interest in the business to her young adult daughter Carol. Betty assures her, in front of family members, that if she transfers her interest to Betty instead, Betty will manage the business until Carol is old enough to take over and give her half of the income in the meantime. In reliance on Betty’s assurances, Ann transfers her interest to Betty.

Unfortunately, after Ann’s death, Betty refuses to honor her promise to Ann. She does not transfer an interest in the business to Carol, nor does she give her any of the income that Ann would have received when she was alive. Legally, the business is Betty’s to do with as she wishes. But that result is unfair; if Ann had not relied on Betty’s promise, Carol would be a co-owner and receive half of the income from the business.

Carol can ask a court to determine that Betty holds half of the business in “constructive trust” for her, forcing her to relinquish a half-interest in the company and the income it has earned to Carol.