Chapter 3: Resulting Trusts

Question 1

If a resulting trust is established, what happens to the equitable interest?

Answer 1

The equitable interest reverts back to the settlor or, if the settlor is dead, to their estate

Question 2

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

Answer 2

1. Trusts arising from a voluntary transfer or purchase in the name of another
2. Trusts arising from a failure to exhaust the beneficial interest under an express trust

Question 3

In the purchase of a home, if a person does not contribute towards the purchase of the property and instead contributes towards home improvements, will a resulting trust be implied?

Answer 3

No, this is insufficient. It would also be insufficient if a person reimburses the title holder after the purchase

Question 4

In the purchase of a home, who has the burden of establishing that a consideration was paid at the time of purchase?

Answer 4

The party claiming to be the beneficiary must provide clear and convincing evidence that they supplied consideration

Question 5

In the purchase of a home, how can the presumption of a resulting trust be rebutted?

Answer 5

By providing evidence that no trust was intended and that the purchase was:

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

Question 6

What is the presumption of advancement?

Answer 6

A presumption of a resulting trust will not arise in the following circumstances:

1. Money was given by husband or fiancé
2. Money was given by father
3. Money was given by a person in loco parentis

Question 7

Can the presumption of advancement be rebutted?

Answer 7

Yes, if the person who provided the purchase money is able to provide evidence that they did not intend to make the gift and instead intended to retain an equitable interest in the property

Question 8

Will acts and declarations after the time of a purchase or transfer serve as evidence in support of claim that a resulting trust has not arisen?

Answer 8

No, only evidence of acts and declarations made by an individual before or at the time of the purchase or transfer will be admissible

Question 9

If a resulting trust arises due to the settlor creating an express trust which fails or does not dispose of all of the property, what will happen to the property?

Answer 9

The trustee holds the property on resulting trust for settlor’s estate.