Implied TR by Op of Law Flashcards
Resulting Trust - when does it arise?
Upon the failure of an express trust or when the express trust purpose is accomplished but the corpus is not exhausted.
Ex: (i) Semi-Secret Trust
(ii) Trust for $10M to build a hospital, but $1M left over and the trust instrument doesn’t address it.
(iii) Express trust fails for any reason and the trust instrument is silent as to what happens.
What is a purchase money resulting trust?
Presumed to arise when consideration of purchase of property is paid by a person other than the person taking title.
Person who paid can sue for property.
Defenses for person holding property: gift or loan
What is the presumption when the person providing consideration bears a close family relationship to the title holder?
Gift and not a trust.
Relationship as parent-child; husband-wife
Can a trust be imposed on a BFP?
No - can’t take property away from a BFP.
The sale or exchange by a trustee of a resulting or constructive trust to a BFP for value cuts off beneficiary’s right to transferred asset.
If the trustee holds any consideration received on the transfer in trust for beneficiary and the sale it not to a BFP, what are the beneficiaries rights?
The beneficiary can impose a trust on consideration receive by trustee.
The beneficiary can impose trust on original asset in non-bfps hands.
What type of trust is imposed if there is fraudulent action?
Constructive Trust
What is a constructive trust?
Implied in various situations where a person acquires trust wrongfully. The goal is to provide a remedy against unjust enrichment.
What are situations that lead to the establishment of a constructive trust?
1) Title to property acquired by fraud, misrepresentation, durress, or mistake.
2) Oral trust of land under limited circumstances.
3) Secret trust.
