implied Trust Flashcards
Which ONE of the following gives rise to the presumption of advancement?
A husband made a voluntary transfer or purchased property in the name of his wife.
A grandfather made a voluntary transfer to his granddaughter on her twenty-first birthday. Apart from the usual seasonal gifts, he had not made any financial provision for her in the past.
A mother provided £20,000 for her son to buy shares in the family’s company
Harry had cohabited with Jenny for 10 years. They had two children. Harry gave Jenny a sports car on the tenth anniversary of their living together.
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Well done. The answer is A.
In B, C and D, it should be relatively easy to find evidence that the transferor intended a gift but nevertheless, the starting point is a presumption of resulting trust.
Which ONE of the following is MOST LIKELY to give Ann an interest under a resulting trust?
Ann pays the conveyancing fees incurred on the purchase of a house bought in the sole name of her boyfriend, Bob.
Ann has paid the monthly mortgage instalments on a house purchased three years ago in the sole name of her boyfriend, Bob.
Ann pays for a conservatory to be added a house purchased three years ago in the sole name of her boyfriend, Bob.
Ann pays £10,000 towards the deposit on a house purchased in the name of her boyfriend, Bob.
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Well done. The answer is D. A resulting trust arises when a claimant contributes to the initial purchase price of a house conveyed into the name of another.
A is not correct because conveyancing fees are not considered as part of the payment of the purchase price of the property which could give rise to a trust interest.
B and C are not correct because subsequent payments of mortgage instalments and paying for subsequent works are not relevant when seeking to imply a resulting trust.
Which ONE of the following statements is CORRECT?
Liam gives his son Peter £5,000 as a marriage gift. The marriage is extremely short-lived. There is a resulting trust back to Liam.
Andrew transfers £20,000 to Tom to hold on trust for James if he attains 30 and if he does not, then for Kim absolutely. James dies aged 27. Kim is alive. Tom holds the £20,000 on a resulting trust for Andrew.
Jessica’s will contains a legacy of £10,000 to Tim on trust to give Jessica’s children “fair amounts”. Jessica has died. The £10,000 will be held on a resulting trust.
Kestrell Bank enters into a contract to give Frances a loan of £10,000. Frances spends the money straightaway and then goes bankrupt. There is a resulting trust for Kestrell Bank.
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Well done. The answer is C. The trust fails because the subject matter is uncertain and, therefore, there must be a resulting trust.
In A, Liam did not create a trust for Peter. It was an outright gift. The marriage was the motive for the gift, no more. The £5,000 belongs to Peter.
In B, the express trust fails because the beneficiary does not satisfy the contingency, but the settlor has said what is to happen in this event. A resulting trust will only arise where a settlor creates an express trust which fails, and there is no direction as to the trust property on such failure.
In D, Kestrell Bank has not created an express trust, and this negates the possibility of a resulting trust. The money was advanced under a contract and the Bank may have contractual rights to recover the loan but cannot claim a resulting trust.
Which ONE of the following statements about common intention constructive trusts is CORRECT?
A constructive trust arises if there was an express common intention that the claimant should have an interest whether or not the claimant acted to her detriment.
A common intention that the claimant should have an interest cannot be inferred.
A common intention that the claimant should have an interest can be inferred from the whole course of dealings.
The whole course of dealings is relevant only to quantifying the claimant’s interest under a constructive trust.
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Well done. The answer is D. The court will not look at the whole course of dealings in order to infer a common intention (so C is not correct). However, the whole course of dealings is relevant to the second stage of quantifying the claimant’s interest.
A is not correct because detriment is required as well as a common intention.
B is not correct because the court can infer a common intention from the fact that the claimant contributed to the purchase price or made a significant contribution to the mortgage payments (Lloyds Bank v Rosset).
Two years ago, Kenneth bought his first home. He had to pay a deposit of 10% of the purchase price and funded the rest of the purchase with a mortgage loan. Kenneth’s father, Harry, gave him the money for the deposit.
Which ONE of the following statements is CORRECT?
There was a presumption that Kenneth holds the title to the house on a resulting trust for Harry.
There was a presumption that Harry intended a gift of the deposit money because the presumption of advancement applies to fathers and their children.
There was no presumption either way because of s60(3) LPA 1925.
There were no presumptions because there has been no voluntary transfer nor a purchase in the name of another.
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Well done. The answer is B. The presumption of advancement applies between father and child.
A is not correct because when a father provides purchase money for his child, the presumption of resulting trust is displaced by the presumption of advancement.
C is not correct because s60(3) LPA 1925 only relates to voluntary transfers of land and this question concerned provision of purchase money.
D is not correct because there has been a monetary contribution by Harry to the purchase of property in the name of another, Kenneth.
When considering how the court quantifies a claimant’s interest in a family home under a constructive trust, which ONE of the following answers is CORRECT?
The courts award an interest proportionate to the claimant’s financial contribution to the purchase price.
The courts will award the share intended by the parties or, if the parties’ express or inferred intention cannot be ascertained, the share which would be fair having regard to the whole course of dealing between the parties.
The courts always award a half share in the property.
The courts award the same share which the claimant would obtain under a resulting trust.
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Well done. The answer is B. The courts try to discover what shares the parties intended. If the intended shares cannot be ascertained, the court will award shares that would be fair.
A is not correct because the share in the property under a constructive trust need not be in direct proportion to the financial contribution made to the purchase.
C is not correct because, while in jointly owned property the starting presumption is equal shares, this presumption can be displaced (see Stack v Dowden) and in claims involving a solely owned property, if the trust is established, the share will be determined in accordance with the parties’ intentions or by the court which may or may not be a half share.
D is not correct because under a resulting trust the share will always be in direct proportion to the financial contribution to the purchase price. This is a significant difference between resulting trusts and constructive trusts
Which ONE of the following statements about proprietary estoppel is CORRECT?
In claims for proprietary estoppel, the assurance that the claimant has an interest has to be an express statement by the legal owner of the property.
In claims for proprietary estoppel, the claimant’s detriment has to consist of the payment of money.
In claims for proprietary estoppel, the court has a discretion over the remedy.
In claims for proprietary estoppel, successful claimants always get the property or interest which was promised.
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Well done. The answer is C. To bring a successful claim for proprietary estoppel, the claimant must show that they received an assurance that they had, or would have, an interest in property which they relied on and acted to their detriment. If an estoppel is established, the court has a discretion over the remedy and will take account of the expectation and the detriment to reach an outcome which is fair and proportionate
A is not correct because the assurance can be an active assurance or can consist of the defendant standing-by knowing that the claimant is acting to their detriment believing that they have an interest in the property.
B is not correct because the claimant’s detriment does not have to be the payment of money. It could comprise refusing jobs, looking after the defendant, or working for low wages
D is not correct because the court will consider whether the detriment the claimant experienced matches the property or interest they expected as a result of the assurances. The remedy is intended to be fair and proportionate and may not be what the claimant was promised.
Bert transfers £30,000 to his solicitor, Samantha, to hold on trust for “those people who have helped my wife and me the most, in equal shares”. The trust fails because the objects are uncertain.
Is the following statement TRUE or FALSE?
Samantha holds the £30,000 on resulting trust for Bert.
True
False
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Well done. The statement is TRUE. Samantha holds the £30,000 as trustee; it is not her money. As the original trust has failed, it is presumed that the settlor, here Bert, would want the money back. Samantha, therefore, holds the £30,000 on a resulting trust for Bert.
Hayden’s will included a legacy of £30,000 to Kristen to hold on trust for “such of my grandchildren as attain the age of 21 and if more than one in equal shares”. The will gave the residue to Victoria. Both his grandchildren were killed in a skiing accident when they were 19 and 17, respectively. Hayden has just died.
Is the following statement TRUE or FALSE?
The £30,000 will be held on a resulting trust for Hayden’s next of kin under the Intestacy rules.
True
False
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Sorry. The statement is FALSE. The trust will fail because neither grandchild satisfied the contingency (they both died before attaining the age of 21). Kristen holds the £30,000 as trustee and it is presumed that the money will result back to the estate. However, the £30,000 will be held on resulting trust for Victoria, the residuary beneficiary. The next of kin would only benefit if the will contained no valid gift of residue.
Is this statement TRUE or FALSE?
Once a couple have cohabited for a period of more than ten years, there is a statutory regime equivalent to the Matrimonial Causes Act which determines the parties’ affairs when their relationship breaks down.
True
False
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Sorry. The statement is FALSE. Where a couple are not married (or in a civil partnership), when their relationship breaks down, their affairs are governed by trust law principles. Only married couples and those in civil partnership benefit from a statutory regime in determining who gets what when the relationship ends in divorce or dissolution
Is this statement TRUE or FALSE?
It is only possible to bring a claim for proprietary estoppel over a disputed interest in land.
True
False
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Well done. The statement is FALSE. A claim for proprietary estoppel can be brought in relation to a disputed interest in personalty as well as land.
Is this statement TRUE OR FALSE?
A party cannot introduce evidence of his own act made after a purchase or voluntary transfer to rebut a presumption.
True
False
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Sorry. The statement is TRUE. A person who wishes to rebut the appropriate presumption following a purchase or transfer cannot use evidence of his actions made after the transaction, only those at the time (Shephard v Cartwright).
Is the following statement TRUE or FALSE?
The courts are more likely to use constructive trusts rather than resulting trusts to determine a cohabitee’s share in a home which is in the sole name of his or her partner.
True
False
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Well done. The statement is TRUE. Because of the limitations of the resulting trust, which focuses solely on monetary contributions made contemporaneous to the purchase of the home, courts generally now determine beneficial interests in the family home under common intention constructive trust principles.
Is this statement TRUE or FALSE?
If bringing a claim under proprietary estoppel, when evidencing that they acted to their detriment in reliance upon the assurance given, the claimant must be able to evidence that they have financially contributed to the property in dispute.
True
False
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Well done. The statement is FALSE. The claimant’s detriment does not need to consist of financial expenditure on the property. The detriment must be substantial, but could be working without remuneration, relocating to a new area so giving up family support and a child’s educational consistency, giving up the chance of alternative employment, the provision of medical care.
Is the following statement TRUE or FALSE?
As with express trusts of land, an implied trust of land, whether a resulting or constructive trust, will need to be evidenced in signed writing.
True
False
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Well done. The statement is FALSE. Implied trusts of any kind do not need to be evidenced in signed writing (s53(2) LPA 1925).