Firm News

Wiggin and Dana recently obtained the dismissal of a constructive trust claim brought against a now-deceased couple by their former daughter-in-law, who alleged that she was the rightful owner of the couple’s valuable vacation property. 

The daughter-in-law alleged that her husband and the couple (his parents) entered into an oral contract pursuant to which the son agreed to purchase the property. However, as part of their estate planning, the couple previously added the claimant’s husband to the property deed as a joint owner with rights of survivorship. The husband contemporaneously filed transfer tax forms indicating that the transaction with his parents was a gift and was for no consideration.

Wiggin and Dana moved to dismiss the claim. The firm argued that the constructive trust claim was barred under New York’s tax estoppel doctrine. The Surrogate’s Court disagreed and denied the motion to dismiss. However, on appeal, the Appellate Division, First Department reversed – holding that because the husband admitted in the tax documents that his ownership interest was for no consideration, the daughter-in-law could not prove an essential element of the claim. Wiggin and Dana partner Steven Malech represented the couple and, subsequently, the fiduciaries of their respective estates in the Surrogate’s Court and in the Appellate Division.