§ 7.06 Trust Principles and Acquisitions Over Time

• Jurisdiction: United States
• Publication year: 2021

§ 7.06 Trust Principles and Acquisitions Over Time

[1]—In General

The previous discussions show that property is characterized at divorce based upon the nature of the consideration used to purchase it. In marital property states,²⁹⁶ divorce courts normally cannot divide separate property. However, there are certain equitable exceptions to this general rule. If it is determined that a spouse is holding a fraction or all of certain property in trust for the benefit of the other spouse, the divorce court can award the trust corpus to the beneficiary.²⁹⁷ The trust can be a resulting, express or constructive trust.

[2]—Resulting Trusts

In order to establish a resulting trust, it must be established that the beneficiary contributed consideration at the time the property was acquired, or made a binding commitment at that time to contribute consideration in the future.²⁹⁸ The beneficiary's interest in the property stems from the fraction of the purchase price contributed. Due to this requirement, resulting trust theory is rarely important in a divorce. If the spouse had contributed consideration at the time of the purchase, under normal marital property theory the spouse (or the marital estate) generally would have an interest in the property.

[3]—Express Trusts

An express trust can arise from an express agreement of the involved parties, or from the behavior of the parties.²⁹⁹ An unequivocal intent to create a trust must be established, and the trust property and the beneficiary must be described.³⁰⁰ Express trusts regarding realty generally must be created by a written document.³⁰¹

[4]—Constructive Trusts

The contours of a constructive trust are less clear than those for a resulting or express trust. No intent to create a trust need be established.³⁰² Constructive trusts are exempt from the Statute of Frauds, so no written document is required, even if realty is involved.³⁰³ The doctrine of constructive trusts is applied when the holder of legal title has been unjustly enriched at the expense of another. Since such a trust is created to avoid unjust enrichment and unconscionable results,³⁰⁴ it is difficult to describe precisely the circumstances under which one will be established.

A constructive trust was established in a Texas case in which an engaged couple looked for a home before their wedding date.³⁰⁵ The male made an offer to purchase which was accepted before the marriage. The prospective bridge apparently was led to believe that she was obtaining an...