Court imposes constructive trust for mother's benefit
A heartbreaking part of my practice is seeing a child take advantage of an elderly parent. A common scenario is the adult child whose "job" becomes taking care of a parent. The arrangement can benefit both, as the parent receives care and assistance and the parent helps the child financially. But it can become abusive as the child takes advantage of a position of trust and confidence to obtain significant money or assets from the parent or has the parent execute a will substantially in the adult child's favor. When the parent relies on the child for care and support, a confidential relationship may be established. In such circumstance, Texas law imposes a fiduciary duty on the child. Simply put, a fiduciary duty requires that the child put the parent's interests above his/her own interests. That means that all material transactions, including gifts, are subject to a strict level of scrutiny requiring to fairness to the parent. In Gray v.Sangrey, the Texarkana court of appeals considered a circumstance where a mother sued her daughter and son-in-law over a house. The daughter and son-in-law took out a loan to purchase the house, but the mother fully satisfied the debt. The mother alleged they had an agreement to transfer the house in her name once she paid off the mortgage. The mother lived in the house until her condition required her to move to a nursing home. It was during the determination of the means by which the she was to pay for her future nursing care that a dispute arose over the status of the title to the home. The court of appeals noted that it was undisputed that the mother paid the down payment on the home, paid the monthly mortgage installments, paid for improvements to the home, moved into the home, and paid off the mortgage, but the daughter and son-in-law refused to transfer the title. The court of appeals approved of the trial court finding that the burden was on the daughter to prove that it was fair to her mother to keep the house in the daughter and son-in-law's names. The court of appeals also approved of the trial court imposing a constructive trust on the house for the mother's benefit.