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Legal > Asset Protection & Trusts Law

Constructive Trusts:

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Broadly speaking, a constructive trust is a remedy that the Court can impose, based on the application of legal or equitable principles, with the primary purpose being aimed at preventing the unconscionable enjoyment of property. A constructive trust can be deemed by the court to arise in a situation where it would be appropriate to do so based on the circumstances and having regard to settled precedent and/or authorities at law or equity.

A common scenario where a constructive trust may arise is where property is registered in the name of one party (A) and another party (B) makes contribution towards the property. The contribution made by (B) could be by working on the property or contributing towards the mortgage repayments, usually but not always where a promise has been made to party (A) or party (B) has been working towards a common intention or agreement, to the detriment of party (B).  In the event that (A) dies without leaving any benefit in the property to (B), the court may declare that an appropriate remedy would be for (B) to have an interest in the property or to receive some form of reward for the contribution (B) has made to the property. 

In general terms, the rationale for constructive trust relief is that, in the absence of such relief, a person may secure or maintain an interest in property or money that would be such, that it would be contrary to equitable principles for that person to maintain that interest. Constructive trust relief can be appropriate where the court finds that a person could not in good conscience retain for himself or herself a benefit, or the proceeds of a benefit, where he or she has so retained the benefit or proceeds in breach of his or her contractual or other legal or equitable obligations to another. 

You may contact our office to speak to an Asset Protection Solicitor or Trusts Lawyer to seek further advice on whether a constructive trust may be relevant in your circumstances, or if you otherwise require legal advice about a potential constructive trust scenario. You can meet with us in our Sydney CBD office or one of our branch offices located across the Sydney metropolitan area. 

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