On behalf of Law Offices of Frye, Fortich & Garcia, P.L. | October 17, 2024 | Trusts
If asked to imagine a trust, what may come to mind first is a written document identifying the grantors, trustees, and beneficiaries, and detailing who gets what assets and how. However, that trust (an express trust) is only one type of trust. An implied trust, unlike an express trust, is not created by a written trust agreement but is established by the courts to uphold justice and prevent unjust enrichment.
There are two primary types of implied trusts recognized in Florida: resulting trusts and constructive trusts.
A resulting trust may arise when an express trust has failed or when an express trust does not fully distribute assets. A resulting trust may also arise when one person pays for a property, but title to that property is taken under a different person’s name, for varying reasons. Oftentimes, this is a transaction of convenience among family members because one or more parties cannot appear on title, even though they are the parties bearing the financial responsibility for the property. In these instances, a court will use a resulting trust as an equitable remedy to reflect the intentions of the transferor which might otherwise unjustly enrich the other party.
A constructive trust is another equitable remedy imposed by a court when someone has wrongfully acquired property through fraud, duress, undue influence, or breach of fiduciary duty. The court uses the constructive trust to correct the situation, requiring the person who wrongfully acquired the property to hold it for the benefit of the rightful owner(s).
Implied trusts are a testament to the flexibility of the legal system in Florida to address unique and complex situations where the rigid application of rules may not result in a fair outcome. They serve as a powerful tool to ensure that equity prevails in disputes over property ownership and distribution. Whenever a matter concerns real estate, it is always in every party’s best interest that any agreements be in writing, and not be left open for possible misunderstanding or misinterpretation. The clearest and best course of action is to work with an experienced estate planning attorney to expressly convey your wishes.
