Children’s Claim For Constructive Trust Gets De Novo Review

After his ex-wife died, Edward Trevino got into a dispute with his children over the disposition of a $100,000 life insurance benefit. Edward was the beneficiary on the policy. But his children pointed to a marital settlement agreement that stated they were to be beneficiaries of any “death benefits.”

The children’s guardian asked for a constructive trust over the life insurance benefit. After the trial court imposed a constructive trust, Edward appealed that order.

The first issue was the standard of review. The Second District Illinois Appellate Court distinguished between review of imposition of a constructive trust and of a marital settlement agreement. “At the outset, we note that, even though the order Edward challenges is one imposing the equitable remedy of a constructive trust … our review is de novo. Typically, the imposition of a constructive trust is a matter for the discretion of the trial court … Here, however, the issue is not whether the trial court abused its discretion in imposing a constructive trust, but whether the marital settlement agreement provided a legal basis for the trial court’s order. Edward has asked us to review only the trial court’s interpretation of the agreement. Our review of a court’s interpretation of a marital settlement agreement is de novo.”

The appellate court ruled that “death benefits,” as used in the marital settlement agreement, included the life insurance benefit, and affirmed the imposition of a constructive trust. Read the whole case, In re Estate of Trevino, No. 2007-0503 (4/7/08), by clicking here.

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