Resulting Trusts Flashcards
How do resulting trusts work where there is a voluntary transfer of personalty?
If A transfers personalty they already own to B for free, a presumption of resulting trust will generally arise. Under a resulting trust, B holds the legal title and A gets the equitable interest in the property.
How do resulting trusts work where there is a voluntary transfer of land?
Section 60(3) of the LPA 1925 provides that ‘[i]n a voluntary conveyance a resulting trust for the grantor shall not be implied merely by reason that the property is not expressed to be conveyed for the use or benefit of the grantee’.
Presumption is less likely to apply than for realty. The court will need additional evidence beyond the actual voluntary transfer (i.e. that the parties were strangers).
How do resulting trusts work where there is a contribution to the purchase price?
Where X purchases property from a seller. However, rather than becoming the owner of that property, X arranges for the property to be put in the name of Y. Y will become the owner holding legal title to the property. However, there may be a presumption that X intended Y to hold that property on a resulting trust for X.
if X contributes towards the purchase price of a property in the name of Y (the balance being paid by 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.
What is the presumption of a resulting trust in favour of a contributor of the purchase price?
The contribution must be contemporaneous with the purchase and directed toward the actual purchase price itself.
Applies to both personalty and realty
What is the presumption of advancement?
When it applies, there is no resulting trust and the transferor is presumed to be gifting property to the transferee.
When does the presumption of advancement apply?
When equity regards the transferor as being under a moral obligation to provide for the transferee.
It applies in cases of voluntary transfers and provision of purchase money from father to child, from person in loco parentis to child, from husband to wife and by male fiance to female fiancee so long as the couple subsequently marry.
How can the presumptions be rebutted?
By evidence that something else was intended before or at the time of transfer.
What are automatic resulting trusts?
Arises where the settlor transfers property to trustees on trust but
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.
