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Title
A message to the Divorce Bar: The constructive trust and the resulting trust are creatures of and
regulated by general principles of equity, not the Uniform Trust Code
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The constructive trust is a tool developed by equity to assist the judiciary in temporarily
securing property that is the source of someone’s unjust enrichment, pending transfer of the
property to its rightful owner. One who procures property by fraud, duress, or undue influence,
or acquires it due to mistake is unjustly enriched. One who acquires property by virtue of
someone else’s fraud, duress, undue influence, or mistake also is unjustly enriched, unless he is a
BFP.
The judicial imposition of a resulting trust, on the other hand, facilitates the return of
legal title from the purported trustee of a trust that has failed ab initio back to the would-be
settlor. In the case of a failure in mid-course, the express trustee morphs into a resulting trustee
charged with returning legal title to the settlor, reversionary interests, whether legal or equitable,
always being vested.
The constructive trust and the resulting trust are said to be “involuntary” trusteeships. As
we discuss in the material featured in the appendix immediately below, sometimes it is not all
that clear whether the constructive trust or the resulting trust is the appropriate procedural
equitable remedy, especially when it comes to innocent unjust enrichment.
Let us assume that ex-wife deeds a parcel of real estate to ex-husband with
the present intention that ex-husband take the legal title, as trustee, not outright. No mention,
however, is made of that intention in any property-transfer documentation. Is the trust
enforceable or does the property belong to the transferee outright and free of trust? On similar
facts, one Washington appellate court, looking only to the state’s statutory trust law, answered
outright and free of trust in that the ex-wife had not formally memorialized her entrustment
intentions at the time of transfer, nor had the ex-husband formally declared himself an express
trustee of the property. See K & W Children’s Trust v. Estate of Fay, 503 P.3d 569 (Washington
2022).
I dissent. There had been a transfer of legal title. There was/is credible extrinsic evidence
that ex-wife had had a present intention to have a trust impressed on the real estate at the time of
transfer. By taking title to the real estate as if it were free of trust in contravention of what the ex-
wife had intended, the ex-husband had been unjustly enriched. The regimes of constructive trust
and resulting trust, each a creature of equity, not statute, have traditionally been exempt from the
statute of frauds’ application to land entrustments, specifically its requirement that there be a
memorializing writing. Ergo: With or without ex-husband’s consent, by operation of law as
enhanced by equity, he at the time of transfer had taken legal title to the real estate as a
constructive trustee, and in so doing, had been saddled with a duty to transfer it on to a willing
and able express trustee of the court’s selection.
