Resulting and Constructive Trusts

Question 1

Resulting Trust arises by:

Answer 1

implication from settlor’s conduct.

Question 2

3 types of Resulting Trusts:

Answer 2

1. purchase money resulting trust
2. resulting trust arising on failure of an express trust
3. resulting trust arising from an incomplete disposition of trust assets (excess corpus)

Question 3

Who is the beneficiary of a Resulting Trust?

Answer 3

Settlor if alive; if settlor is deceased, successors in interest.

Question 4

Resulting Trust arising on failure of an express trust

Answer 4

where a settlor has conveyed property to a trustee under an express trust and (1) the trust is void or unenforceable, or (2) the beneficiary is dead or cannot be located.

Question 5

Resulting Trust implied from excess corpus

Answer 5

if trust property remains after purpose fulfilled, resulting trust for settlor arises.

Question 6

Purchase Money Resulting Trust

Answer 6

Person taking title did not supply consideration; sole duty is to convey title to one furnishing consideration.

No resulting trust presumption if parties are closely related.

Question 7

What is a Constructive Trust?

Answer 7

Not really a trust but rather is a flexible equitable remedy to prevent unjust enrichment resulting from wrongful conduct, such as fraud, undue influence, or breach of a fiduciary duty.

Question 8

How do you get a Constructive Trust?

Answer 8

must be requested as a remedy in a court action; not automatic!

Question 9

Mere breach of a promise will not raise a __________.

Answer 9

constructive breach

Question 10

Constructive Trust will be imposed when:

Answer 10

1. Fraudulent promise (promisor never intended to keep it)
2. Breach of a promise by one in a confidential relationship (which can include attorney-client, doctor-patient, business partners, family relationships, friendships)
3. Breach of a promise by decedent’s devisee or heir to hold property for the benefit of a third person
4. Breach of promise by the decedent to devise property to one rendering services in reliance thereon (but no constructive trust here if damages adequate)
5. Breach of promise to the debtor by the buyer at the foreclosure sale to hold the property for the debtor, causing debtor to forgo bidding at the sale.