4. Resulting Trusts

Question 1

What are resulting trusts?

Answer 1

Arise where a legal owner has transferred ownership to a 3rd party but, equity recognises that they should retain/regain beneficial interest (normally failed trust)

Question 2

What 2 categories of resulting trusts are there?

Answer 2

1. Automatic
2. Presumed

Question 3

When does an automatic resulting trust arise?

Answer 3

Default trusts that arise when transfer on trust fails, either wholly or partly (for lack of subject or object certainty).

Result: trustees hold property on automatic resulting trust for settlor.

Only relevant where trust has been consituted.

Question 4

When does a presumed resulting trust arise?

Answer 4

A person make a gratuitous transfer of property to a 3rd party without evidence of certainty as to intention.

Equity raises presumption of a resulting trust

This can be rebutted by evidence that transferor did not intend property to held on trust for them

Only relevant where trust has been constituted.

Question 5

When is a gratuitous transfer presumed to be a gift?

Answer 5

• Husband to wife (inc made during engagement)
• parent to child
• loco parentis to child

Question 6

What scenario is the implication of a resulting trust no longer applied to?

After Stack v Dowden

Answer 6

Trusts of the Family Home.
These are now dealt with using constructive trusts.