Resulting and Constructive Trusts Flashcards
Resulting Trust —
a trust involving reversionary interests that are based on the presumed intent of the settlor.
Constructive Trust —
a flexible equitable remedy used to prevent unjust enrichment resulting from wrongful conduct such as fraud, undue influence, or breach of a fiduciary duty.
What are the types of resulting trusts?
There are three types of resulting trusts: 1) purchase money resulting trusts; 2) resulting trusts arising on failure of an express trust; and 3) resulting trusts arising from an incomplete disposition of trust assets.
Purchase Money Resulting Trust —
a resulting trust which is presumed whenever the B furnishes consideration for the acquisition of real or personal property but, with B’s consent, title is taken in the name of another.
Resulting Trust on Failure of Express Trust —
a resulting trust arises where a settlor has conveyed personal 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.
Resulting Trust Implied from Excess Corpus —
a resulting trust in favor of the settlor arises when the trust purpose is fully satisfied and some trust property remains. There could be a resulting trust of part of the corpus even before the trust is terminated if it is clear that there is excess trust corpus.
Does a constructive trust result when a person steals or converts another’s property?
No, unless the thief uses the stolen property to gain additional property. The gained property is deemed to be held in a constructive trust for the person whose property was stolen.
Does a constructive trust result when a person acquires property from another by fraud, duress or mistake of fact?
Yes.
When might a court create a constructive trust in regards to a fiduciary?
Where a fiduciary breaches their fiduciary duty, the court might create a constructive trust in favor of the person to whom the fiduciary duty is owed.
Does the mere breach of a promise create a constructive trust?
No, generally.
When might the breach of a promise result in a constructive trust?
Where the promise was fraudulent, was made by someone with a confidential relationship to the other party, where there was a devisor-devisee relationship, or similar acts.
