Resulting Trusts

Question 1

Presumption of resulting trust - voluntary transfer of personalty

Answer 1

If A transfers personalty they already
own to B for free, a presumption of resulting trust will generally arise.

The presumption of resulting trust can be rebutted by evidence of settlor’s actual intention e.g. gift and there’s a birthday card.

A different presumption (of advancement) might apply to family members who might be expected to make gifts to each other.

Question 2

Presumption of resulting trust - voluntary transfers of land

Answer 2

Presumption of resulting trust is less likely to apply if the property being transferred is
land.

It is still possible for a resulting trust to arise out of a voluntary transfer of land, but the court would need some evidence or additional factor (eg that the transferor and transferee are strangers) to arrive at that conclusion.

Question 3

Presumption of resulting trust - purchase money cases

Answer 3

X purchases property from a seller.
X arranges for the property to be put in the name of Y. Y hold legal title.
Presumption that X intended Y to hold that property on a resulting trust for X. X will own the equitable
interest.

If X contributes towards the purchase price of property in the name of Y, there may be a presumption that X intended Y to hold that property on a
resulting trust for X and Y – the size of X’s and Y’s beneficial interest under this resulting trust
will be proportionate to the size of their respective contributions.

Applies to cases of personalty and realty.

For RT, contribution must be:
(a) contemporaneous with the purchase
and
(b) directed towards the actual purchase price itself

Question 4

Presumption of advancement/gift

Answer 4

It applies in cases of voluntary transfers and provision of purchase money:
(a) from father to child (the child here can be either a minor or an adult);
(b) from person in loco parentis to child. A person in loco parentis is effectively a guardian
who has taken on the responsibility to provide financially for a child. This responsibility
generally finishes when the child reaches the age of 18 years;
(c) by husband to wife; and
(d) by fiancé (male) to fiancée (female), so long as the couple subsequently marry.

Does not work if roles reversed e.g. wife transfers.

Question 5

Resulting trusts when the beneficial interest is not completely disposed

Answer 5

An automatic resulting trust arises where:
(a) the settlor transfers property to trustees on trust; but
(b) the anticipated trust does not dispose of all or part of the equitable interest, because the
declared trust is void or does not exhaust the trust fund.

An attempted trust might not dispose of the equitable interest where:
(a) there is a gap in the beneficial ownership because there is no beneficiary who attains a vested interest;
(b) the attempted trust lacks certainty of objects (such as a trust for ‘my best friends’);
(c) the attempted trust does not define the beneficial interests with sufficient certainty;
(d) the attempted trust offends the rules against perpetuity;
(e) the attempted trust offends the beneficiary principle.