3. Resulting Trusts

Question 1

What are the two situations in which a resulting trust will arise?

Answer 1

Trusts arising:

1. Following a voluntary gift or purchase of property in the name of another (presumed resulting trust)
2. On a failed transfer on trust (automatic resulting trust)

Question 2

In the case of voluntary gifts, what is the general rule in equity where A transfers the legal title in property to B without consideration, and there is no evidence as to why the transfer was made?

Answer 2

Equity presumes that A did not intend to make a gift and B holds the property on resulting trust for A

Question 3

What is the situation where A provides purchase money for real or personal property, but legal title is held by B?

Answer 3

B holds the property on resulting trust for A in proportion to the amount A provided

Question 4

For the purchase money rules of presumed resulting trusts to apply, what must the would-be beneficiary’s purchase money contribution actually go towards, and when must it be supplied?

Answer 4

Consideration for the purchase of the property. It is not sufficient that the money is used to make improvements, or pay taxes.

It must be supplied before the purchaser takes legal title.

Question 5

For the purchase money rules of resulting trusts are to apply, when must the consideration be supplied by the would-be beneficiary?

Answer 5

At or before the title holder takes legal title (rule will not apply if the title holder is reimbursed after the fact)

Question 6

What is the standard of proof and who has the burden in a presumed resulting trust?

Answer 6

The would-be beneficiary must prove by clear and convincing evidence that they supplied the consideration

Question 7

If a presumption of resulting trust has arisen generally, what three things can the title holder suggest to rebut it?

Answer 7

Suggest the money used as consideration was:

1. A gift
2. A loan
3. Payment of a debt

Question 8

When is the presumption of resulting trust deemed not to apply, and what are three archaic, yet testable situations in which this may arise?

How is the transfer treated?

Answer 8

The presumption of advancement applies when the provider of the purchase money is treated as being under a moral obligation to make financial provision for the recipient:

1. Husband to wife
2. Father to daughter
3. Loco parentis (assumed parental duties); only one which applies to females

The transfer is treated as a gift.

Question 9

How may the provider rebut the presumption of advancement (in husband to wife, dad to daughter resulting trusts)?

Answer 9

Providing evidence of acts and declarations before or at the time of purchase or transfer to show they intended to retain an equitable interest