Resulting Trusts

Question 1

Deifne personalty.

Answer 1

Any kind of property other than land.

Question 2

Explain the presumption of a resulting trust by voluntary transfer of personalty.

Answer 2

• Where person A transfers personalty to person B for free, presumption of a resulting trust will generally arise.
• As such, person B holds the legal title and person A retains an equitable interest.
• Note voluntary transfers are those where no conversation is provided in return.

Question 3

Which two things are to be considered where there is a resulting trust arising from a voluntary transfer of personalty?

Answer 3

1) Presumption of trusting trust can be rebutted by evidence of the transferors actual intention. Eg if money was given in a birthday card, it would be evidence transferor intended it as a gift. Underlying presumption of resulting trust is therefore only apparent where there is no evidence of the transferor’s intention (either through words or conduct).

2) A different presumption may arise between family members (such as the presumption of advancement) who might be expected to make gifts to one another.

Question 4

Explain whether there is a presumption of a resulting trust on voluntary transfers of land.

Answer 4

• Presumption of resulting trust less likely to apply if land is the property being transferred.
• S60 LPA 1925 provides a voluntary conveyance does not imply a trusting trust for the transferor just because there is an absence of express or implied intention it is for the benefit of the recipient.
• A such, regulating trust can still arise where land is the property being gifted, but the courts would need further evidence this was the case (ie absence of intention it is a gift is not sufficient to prove a resulting trust).

Question 5

Explain the presumption of a resulting trust in cases where one person buys a property and puts it in the name of another.

Answer 5

• A buys property from a seller but decides to put it in the name of person B.
• B becomes the owner holding legal title to the property.
• However there is likely a resulting trust for A (unless evidence to the contrary) and there is therefore a presumption that A intended B to hold that property on resulting trust for A. A therefore owns the equitable interest in the property.
• There may also be a presumption of a resulting trust if both parties contribute to the purchase price but the legal title is held solely in one of their names. As such if X and Y both contribute different proportions to the purchase price, and Y holds legal title, it is likely there is a resulting trust and the beneficial interest will be held in the proportions they contributed.

Question 6

Explain the presumption of a resulting trust in cases where two or more people contribute to the purchase price of the property.

Answer 6

• There maybe a presumption of a resulting trust if , when property is bought, someone contributes to the purchase price.
• As such if person A and B both contribute to the purchase price and the property is registered solely in the name of A, there is a presumption that person A holds the equitable interest in the property on resulting trust for themself and person B in the contributions they made to the purchase price.

Question 7

For a contribution to give rise to a presumption of a resulting trust, there are two requirements. What are the two requirements?

Answer 7

1) At the time of the purchase (does not count if the contribution is made after the event); and
2) must be directed towards the actual purchase price itself (eg payment of legal/ conveyancing fees in relation to the purchase will not count as a contribution).

Question 7

Explain the presumption of advancement.

Answer 7

This applies where equity regards transferor as being under moral obligation to provide for the transferee. It applies in cases of voluntary transfers and the provision of purchase money:

a) from father to child (child here can be either a minor or adult);
b) from person who is a guardian who has taken on the responsibility to provide financially for a child (although this responsibility usually ends when the child turns 18);
c) from husband to wife;
d) by fiancé (male) to fiancé (female) as long as the couple subeseuqntly marry.

Note that presumption does NOT apply if the roles are reversed (eg wife to husband or adult child to father). in such situations a resulting trust will apply unless rebutted by contrary evidence.

Question 8

Explain when an automatic resulting trust arises.

Answer 8

1) The settlor transfer property to trustees on trust ; but
2) The anticipated trust does not dispose of all or part of the equitable interest, because the trust is void or does not exhaust the trust fund.

Question 9

Explain how presumptions of resulting trust and the presumption of advancement are rebutted.

Answer 9

The presumptions are easily rebutted by showing the transferors intention was contrary to that presumption.

Note evidence to rebut an underlying presumption must be of the transferor’s intention before or at the time of the transfer. Evidence of intention after the transfer is not sufficient.

Question 10

Explain how an attempted trust might not dispose of the equitable interest.

Answer 10

1) There is a gap in the beneficial ownership because there is no beneficiary who attains a vested interest; or
2) Attempted trust lacks certainty of objects (ie beneficiaries are unclear); or
3) The attempted trust does not define beneficial interests with sufficient certainty (eg words such as ‘a decent amount of the £250,000 to my daughter’); or
4) The attempted trust offends rules against perpetuity; or
5) The attempted trust offends the beneficiary principle.

Question 11

Are any formalities needed to create a resulting trust?

Answer 11

• Written evidence is needed for an express trust over land to comply with S53 LPA 1925.
• No written evidence is needed for an implied trust (such as a resulting trust) over land. S53(2) LPA 1§925 confirms this.