What is a constructive trust?

A constructive trust is not a trust set up by a settlor (the original owner of the property). Instead, a constructive trust is a trust created by a court because of bad actions taken by someone. For example, if someone improperly acquires property (such as by fraud), the court may put the property into a constructive trust, returning equitable title to the person who originally owned the property while leaving legal title with the wrongdoer.