Jul 21

Court May Place Estate Assets in Constructive Trust During Divorce Action Following a Spouse’s Death but Prior to a Final Judgment (N.J. Super. Div.)


John and Emmaline O’Hara were married in 1955. Emmaline filed for divorce in 2012 and a litigious divorce proceeding ensued. John died unexpectedly during the pendency of the action. John’s last will created a marital and family trust for Emmaline’s benefit, the terms of which permitted, but did not require, the trustee to make principal distributions to Emmaline. The court subsequently granted a motion by Emmaline to join John’s estate as a defendant to the matrimonial action and add a claim for a constructive trust. The estate, in its motion to dismiss for failure to state a claim, argued that a constructive trust was not necessary because Emmaline had not been disinherited and there were no exceptional circumstances justifying equitable relief. After additional discovery, the court concluded that, although John’s last will established trusts for Emmaline’s benefit, it did not guarantee her the rights she would have otherwise been entitled to under the alimony and equitable distribution statutes. The order was affirmed on appeal. In exceptional circumstances equitable relief, including constructive trusts, may be available in divorce actions following a spouse’s death but prior to entry of a final judgment. The appellate court held that John’s death did not diminish Emmaline’s right to equitable distribution and further discovery was warranted to determine whether the estate would be unjustly enriched if it retained full interest in the marital assets.

O’Hara v. O’Hara, 2016 WL 731863 (N.J. Super. Div. Feb. 25, 2016) (unpublished)