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No Rigid Formula for a Constructive Trust

The Second Department determined that a petition seeking to impose a constructive trust on an IRA properly survived a motion for summary judgment. The petitioners are the children of James (now deceased) and the former beneficiaries of James’ Oppenheiner Funds IRA.  The respondent, Holbrook, is the executor of the estate of James’ second wife (the decedent) and the current beneficiary of the Oppenheimer IRA.  The petitioners alleged that, in return for James’ naming the decedent the beneficiary of the Oppenheimer IRA, the decedent promised to sign a consent form making petitioners the beneficiaries of another IRA.  The petitioners alleged that, when presented with the consent form, the decedent refused to sign it:

…[T]he petition seeking to impose a constructive trust adequately states a cause of action to impose a constructive trust on the proceeds of the Oppenheimer Funds IRA. “The usual elements of a constructive trust are (1) a confidential or fiduciary relation[ship], (2) a promise, (3) a transfer in reliance thereon and (4) unjust enrichment'” … . However, these factors “are not an unyielding formula which limits a court’s freedom to fashion this equitable remedy’ and the requirements are not to be rigidly applied” … . Thus, a constructive trust “will be erected whenever necessary to satisfy the demands of justice” … .

Here, the marital relationship between James and the decedent provides the necessary confidential relationship …. . The petitioners have sufficiently alleged a promise by the decedent, a change in beneficiary of the Oppenheimer Funds IRA to the decedent in reliance upon that promise, and the decedent’s, and then Holbrook’s, unjust enrichment therefrom. Contrary to Holbrook’s contention, the petitioners possessed a sufficient interest as the previously designated beneficiaries of the Oppenheimer Funds IRA to seek to impose a constructive trust on the proceeds … . Matter of Harold, 2013 NYSlip Op 08629, 2nd Dept 12-26-13

 

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