You have probably heard of the various types of trusts in Illinois, including irrevocable and revocable trusts, many of which are used in estate planning. Did you know that there are other types of trusts, some of which are created specifically by the courts? One example is constructive trusts.
What makes these constructive trusts different from other ones? In a typical trust, the grantor transfers ownership of property to a trustee who manages the property for the benefit of a third party who is the recipient of that property. In constructive trusts, the defendant -- who often has wrongfully seized property -- acts as the trustee and surrenders profits associated with the property to the plaintiff who has been wronged in the case.
Constructive trusts are generally not part of an estate plan. Instead, they are used as a tool for legal recompense. For example, a celebrity was recently granted a constructive trust over profits from a book that defamed him. The unjust profits from the book were placed into a constructive trust and delivered to the celebrity by the book's author. Constructive trusts can also include property that is obtained through the commission of a crime.
Trust administration of all types can be difficult to understand. A qualified team of experts, including a financial professional and an experienced Illinois attorney, can provide you with the information you need to learn more about constructive trusts as well as other types of asset protection. These teams can provide support for all types of trust administration, no matter the origin of the trust.
Source: FindLaw, "What Is a Court-Ordered Constructive Trust?," Daniel Taylor, accessed May 11, 2017