Wed, May 20th, 2009
A Resulting Trust Where an Express Trust is Not There
I’ve written about the “constructive trust” lately, and here I’m switching gears slightly to talk about a resulting trust. I say slightly, because most lawyers still liken a resulting trust to a constructive trust. But the two are different. A constructive trust is a remedy that is put in place to rectify a fraud or other improper act on the part of the “trustee”. A resulting trust, instead, is utilized by the courts as a remedy to enforce the intentions of the parties. Difference? A resulting trust carries out the (somewhat) good intentions of the trustee and requires him/her to hold it as the trustee for the person who should hold title.
There are several old cases dealing with mining claims where the parties had difficultin in transferring title to the property, or the mining claims. One 1800s case sprung from a mining claim in Nevada County (Grass Valley). Many of the cases, whether involving mining claims or not, address the failure of an “express trust”. That is, a trust that was written to transfer property from one person/entity to another. In these cases, the trust may fail for some reason, such as an illegal purpose or an improperly executed document. In order to achieve the transfer where the “trustee” is not cooperating, the beneficiary must bring an action to enforce a “resulting trust”, to carry out what the “result” should have been.
I’ll give an example or two where a court DID NOT allow a resulting trust in my next post.
Posted by Nick Yonano at 04:34
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Labels: constructive trust, fraud, land, real estate, trust
Wed, April 15th, 2009
Estate Plan for Your Parents-Looking Out for Your (Older) Loved Ones
So much focus on the importance of getting your immediate family’s future in order with your own estate plan. And rightfully so. What is often neglected is the need for the older parents, who never got around to putting a plan together. There are many questions, as this reader brings up, that need to be answered so that everyone in your family can be comfortable with the plan in place. The company, Elder Options, Inc., is a local business, out of the Sacramento and El Dorado County area, that helps families get their finances and real estate options in order when an older family member is in need. Check out this article in today’s Village Life (an El Dorado Hills weekly newspaper). It may answer a couple of questions you have. Important ones, such as “when is a child responsible for his/her parents’ liabilities for health care?”. Still have questions about this subject? Please call a trusted attorney or adviser.
Posted by Nick Yonano at 09:11
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Labels: el dorado hills, estate planning, trust
Fri, March 13th, 2009
What’s so Constructive about this Type of Trust?
Unlike the living trust most people are familar with, there is a legal remedy out there which the courts have to declare to be valid. Known as a Constructive Trust, this is a judicial remedy which holds that person A holds title or possession of property that truly belongs to person B, and person A obtained it wrongfully, so person A holds it in trust for person B. It’s known as a “fraud-rectifying” trust, which means that it’s in place only to make up for the fraud that a person commits to get the property in the first place.
Most of the property involved in an action to impose a constructive trust is real property. But the trust could also apply to personal property, such as stock accounts or checking accounts. I’ll present some examples in my next post.
Posted by Nick Yonano at 08:48
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Labels: constructive trust, fraud, land, real estate, title dispute, trust
Wed, March 11th, 2009
Reimbursement of a Down Payment on a Home
Just settled a case involving many real estate and trust issues. Settlors of the trust were quite possibly tenants in common if the trust was properly revoked. Settlors split up and one left the house before the possible revocation. Years before, the mother of one of the settlors allegedly loaned the couple some money to buy the home, but did not ask to have a lien on the property. So does she have a right to get her down payment back?
One argument is that she has what is called a “resulting trust”, which means that the couple holds her interest in trust for her, to be paid back when the property is sold or refinanced. The counter to that is since there never was an agreement to hold the property in trust, no such “lien” exists.
We never tried the case, and there were many more facts which would have complicated the outcome, but you should be aware that there is a common law remedy known as a “resulting trust”, which is there to protect someone who loans money to another to buy property. It is essentially an “intention-enforcing trust”. I’ll write later about a “constructive trust”, which is a “fraud rectifying” trust. Similar to a resulting trust.
Posted by Nick Yonano at 04:30
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Labels: constructive trust, land, revocable trust, trust
Thu, December 18th, 2008
Own a Partial Interest in Property? A Trust is Still Your Best Option
Some people ask me if a living trust (revocable trust) works for them if they share ownership in real estate. My answer is always the same: Sure it does, and you can hold your interest in your own trust just as if you owned the entire interest (fee simple) in the property.
Most situations where someone owns a partial interest, at least in residential property, is where the parents share title with the children. There are also many cases where business partners own the property together, usually as tenants-in-common (I’ll write later about why a joint tenancy is usually not recommended here).
If someone owns a partial interest in property, they can form their trust, just as they would in a conventional ownership, and deed their interest to the trust. The co-owners are not permitted to interfere with this transfer, provided their interest is not affected.
Why would a co-owner’s interest be affected by a transfer? In most cases where this is a concern, it’s because the transfer accompanies a change in the financing of the property, such as a refinance.
If you own ANY interest in real estate, your best option is usually to let this interest be held in a living trust.
Posted by Nick Yonano at 02:25
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Labels: Uncategorized, estate planning, real estate, revocable trust, trust
Sun, December 7th, 2008
A Financial Advisor That Knows the Importance of Estate Planning is Essential
I wrote the other day about the importance of funding a revocable trust with your real estate and securities. Much of the focus is often on putting one’s home in a a trust to take advantage of the ease of transferring it to your family. Same goes for your stocks and your mutual funds. If you have an attorney that properly structures your trust and a financial advisor that understands the importance of managing the funds while they are safely held in your trust, you’re way ahead of the game.
In the Sacramento area, including Folsom and El Dorado Hills, one company which I would highly recommend is Hanson McClain. They are a trusted firm that looks out for your financial well-being but also understand the importance of the transfer of your assets to your family when you’re not around, essentially your family’s financial well-being. Check them out when you get a chance. They also host a weekly radio call-in show and write some interesting columns.
A couple of advisors I recommend, among the many at Hanson McClain who are highly-qualified, are David Cox and Eric Henry.
Posted by Nick Yonano at 05:25
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Labels: estate planning, revocable trust, securities, stocks, trust
Wed, November 19th, 2008
Probate Contests over Real Estate
I’ve always said that for some reason real estate brings out the best, and worst in people. This is especially true with families, where a home or ranch can provide the greatest memories, or the most bitter of feuds. When a family member dies holding real estate that is not clearly delegated to a trustee to administer, the risk of problems becomes all too real. Just visit the probate department of any courthouse and listen to some of the war stories in the hallway.
The best, and sometimes only, solution, is to make sure the property is funded in a trust, and your successor trustee is someone you “trust” to make sure the property, and its income, goes where you would like it to go. Then make sure the trust document, or declaration as some call it, is drafted well. If the trustee’s directions are clear and enforceable, your family will always have good memories of that home.
Posted by Nick Yonano at 04:38
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Labels: real estate, revocable trust, trust
Sat, September 13th, 2008
Estate Planning Info at El Dorado Hills Community Fair
Instead of kids’ soccer games, which is my most favorite way to spend Saturdays, I will have a booth at the El Dorado Hills Community Family Fair. I’m mostly going to promote my firm’s estate planning services. Trusts, wills, advanced health care directives, etc. So if you’re in the area stop by.
Oh, and I am also holding a raffle for 2 tickets to the 49ers vs. Patriots game next month. I’ll announce the winner here soon. Drawing is today at 4:00 p.m. Go Niners!
Posted by Nick Yonano at 03:41
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Labels: el dorado hills, estate planning, revocable trust, trust, wills
Thu, September 27th, 2007
To Trust in Another: The Constructive Trust
The constructive trust. To most it’s just another legal term that confuses the average person. Lawyer speak. But I think it’s important for anyone in the real estate or title industry to understand. A constructive trust is essentially a term to refer to the manner in which one individual (the trustee) holds legal title for another individual (or individuals). This arrangement often comes up when one person takes legal title for another because, for example, the beneficiary could not qualify for a loan to buy the property. (There are many other reasons why one person would take title for another, such as in a partnership to develop or manage real property.) Even though the title holder, is well, on title, the beneficial owner is the true owner, and the title holder is merely a constructive trustee. If the “trustee” disagrees that there is such an arrangement, a complaint is often filed, and there are many factors that a court will look at in deciding whether there is a constructive trust. (The court will have to determine what the intent of the parties was at the time the title was put in the “trustee’s” name.) One factor is who made the payments for the mortgage or perhaps property taxes. Another factor is why the title was placed in the defendant’s name.
A similar type of trust is a resulting trust. I’ll post about this one later. Both types of trusts are important to understand in today’s real estate environment.
Posted by Nick Yonano at 03:42
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Labels: constructive trust, title dispute, title holder, trust
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