Constructive Trusts: If Spouse Isn't Contributing Child Support

By Snyder Sarno D'Aniello Maceri & da Costa LLC on June 29, 2020

Constructive Trusts A Viable Option If Spouse is Not Properly Contributing Child Support

If you are involved in a dispute with your ex-spouse and you believe he or she is recklessly spending the money from joint accounts and/or unethically taking money from savings, such as college funds for children, an appropriate remedy could be the imposition of a constructive trust over his or her share of the assets (i.e., restraining his or her share of the assets to secure future payment).

In D.M.H. v. H.G.H. NO. A-4267-17T2 (App. Div., June, 12, 2020), a case argued by our partner, Scott D. Danaher, Esq., Defendant alleged that due to his termination of his six-figure salary and the change of technology that impacted his current employment he was unable to continue his alimony and child support payments. However, Plaintiff demonstrated at trial that Defendant had taken money out of their accounts while in Europe to pay an alleged debt, had gambled away money, and had withdrawn $77,000 from the children’s college savings account. Defendant also had withdrawn almost $15,000 at ATMs at or near casinos. Defendant claimed to use these funds to pay debts but did not have documentation to substantiate the debts or his repayment of the debts. After considering the money Defendant had spent and his failure to contribute toward his children’s support, the court deemed it necessary to impose a constructive trust over his share of the assets to secure his future payment of child support and other financial obligations.

Imposing a constructive trust requires a two-prong test. The first prong states that the court must find the party has committed a “wrongful act "(quoting D’ippolito v. Castoro, 51 N.J. 584, 589 (1968)). The “wrongful act” is usually pertaining to “fraud, mistake, undue influence, or breach of a confidential relationship which resulted in the transfer of property.” The second prong states the “wrongful act must result in a transfer or diversion of property that unjustly enriches the recipient.” Flanigan v. Munson, 175 N.J. 26 597, 608 (2003).

While the imposition of a constructive trust is not commonplace, there are specific factual circumstances that may necessitate it. If you believe that the specific facts in your matter require the imposition of a constructive trust, you should discuss it with our family law attorneys.

If you or a loved one require assistance regarding a family law matter, please contact the skilled matrimonial attorneys at Snyder Sarno D’Aniello Maceri & da Costa LLC. Call us today at (973) 274-5200. SSDMD has fully adapted to the social distancing requirements and is offering contact-less options for consultations, meetings, mediations and arbitrations.