Ch 05 - Resulting Trusts Flashcards
What are implied trusts?
Implied trusts are trusts that arise because the law deems them necessary, not because the settlor explicitly created them. There are two types: Resulting Trusts and Constructive Trusts.
What is a resulting trust?
A resulting trust is presumed when property is transferred without clear evidence of the intent behind the transfer (such as gift or loan). The law presumes that the settlor intended to create a trust but failed to make it explicit.
What presumption applies in a resulting trust?
In the absence of evidence suggesting a gift or loan, the law presumes that the transferee holds the property on trust for the transferor.
What is the presumption of advancement?
The presumption of advancement applies in transfers between certain relationships, such as father to child or husband to wife, where the law presumes the transfer is a gift rather than a resulting trust.
Can the presumption of advancement be rebutted?
Yes, the presumption of advancement can be rebutted with evidence to the contrary, and such evidence must typically be contemporaneous with the transfer.
What happens if X contributes to the purchase of property but Y owns it?
In most cases, the law presumes a resulting trust, meaning Y holds the property on trust for X in proportion to their contributions, unless X is a father or husband, in which case the presumption is a gift.
How can the presumption of a resulting trust be rebutted?
The presumption of a resulting trust can be rebutted with evidence of the transferor’s intent, which must generally be contemporaneous with the transfer.
What happens when an express trust fails?
If an express trust fails (e.g., due to unfulfilled contingencies or lack of certainty), the beneficial interest in the property typically reverts back to the settlor or the settlor’s residuary estate.
What are some examples of when an express trust might fail?
Examples include:
- A contingency not being met (e.g., a trust for a child who dies before a certain age).
- Lack of certainty of objects (e.g., unclear beneficiaries).
- A purpose trust failing (e.g., non-charitable purpose or perpetuity issues).
What happens if a purpose trust fails?
If a purpose trust fails (e.g., because it’s not charitable or violates perpetuity rules), the beneficial interest typically results back to the settlor.
What is the outcome if an express trust has failed but the property still needs to be dealt with?
If the express trust has failed and no valid beneficiary is identified, the property typically results back to the settlor or the settlor’s residuary estate.
What are constructive trusts?
Constructive trusts will be covered in the next video. They arise based on fairness, typically when someone holds property unfairly or in breach of trust.
