Resulting trusts

Question 1

Autoamtic resulting trusts?

Answer 1

Arise when there has been some sort of failure in creation of a transfer on trust.
- Effectively a default position which returns the beneficial interest to settlor and giving them Saunder v vautier rights and thus ability it collapses trust.
Occurs if
Fails for uncertainty of objects
Fails for uncertainty of subject matter
Noncompliance with the beneficiary principles

Even where a trust is validly created it can still fail
- If a private trust has a run for the 125-year full perpetuity period – there is no gift over
- The purpose of non-charitable trust can no longer be carried out
Then the property is held on resulting trust for settlors estate.

Question 2

Presumed resulting trusts?

Answer 2

Gratuitous transfer resulting trust
- Where a transfer is gratuitous and there is not evidence the transferor intended recipient to receive the property as gift – they arise by way of presumption that transfer intend to create a trust. CAN BE REBUTTED BY EVIDENCE SHOWING INTENTION WAS NOT A TRUST
(a) If B provides consideration for the transfer, there is no presumption of resulting trust. The transaction is a sale.
(b) If B provides no consideration, there is a presumption of resulting trust. But if there is evidence that A intends to make a gift to B, the presumption will be easily rebutted and B will become
the full legal owner of the property.
(c) If B provides no consideration and can adduce no evidence that A intended to make a gift, B will hold the asset on a resulting trust for A.

Question 3

Purchase money resulting trust?

Answer 3

• Rather than transferring an asset to someone else – a person pays all or part of the purchase price for an asset.
• Regardless of how legal title is held, A and B will be treated as having equitable interests which reflect their respective contributions to the purchase price.
• DOESN’T APPLY TO FAMILY HOMES

Question 4

Presumption of advancement?

Answer 4

Presumption of advancement – MEANS there was a presumption of a gift.
- From husband to wide – very limited – no presumption if from a wife to a husband or a fiancé to a fiancé
- From a parent to child – clearly applies if from father less clear if from child
- From a person in loco parnetis to a minor child – if taken on financial responsibility,