Some Nevada residents may worry that their estate plans won’t turn out as desired in spite of careful work to detail their wishes in a living trust or last will and testament. However, constructive trusts can be used to address a number of situations involving the incorrect or unlawful transfer of property. A constructive trust is a temporary trust that is used mainly to handle the transfer of assets to the intended or rightful recipients.
One situation in which a constructive trust might be used is in the case of a homicide. If a beneficiary is found to have obtained property by wrongfully causing the death of the testator of a will or grantor of a trust, for example, that party would not be entitled to benefit. The assets in question would be transferred into a constructive trust. The beneficiaries of this temporary trust would be those who would ordinarily have received the property in question if the person responsible for the testator’s death had pre-deceased that individual.
Another situation that might concern a testator is the potential breaking of a promise to use funds allocated in a will or trust for the care of another person. If a beneficiary reneges on such a promise, they could become a constructive trustee to accomplish the financial goal of the testator. Constructive trusts can also be used to address the breach of trust or duty by an appointed trustee.
During the trust planning process, an individual might have concerns about issues such as loyalty. Strategies might be explored for ensuring that a trustee cannot misuse funds if a grantor becomes incapacitated. If a trustee demonstrates behavior that indicates the potential for breach of duty or trust, a grantor might meet with a lawyer to revise the estate plan.