Resulting Trusts Flashcards
What are resulting trusts?
Trusts whereby the property is held on trust for the trustor ie the equitable interest ‘results’ back to the transferor or contributor
When do automatic resulting trusts arise?
They arise where there has been some sort of failure in the creation of a transfer of trust
What is the result of an automatic trust?
The beneficial interest returns to the settlor, who then has Saunders v Vautier rights - allowing them to collapse the trust and either retain the property or re-attempt the intended express trust
What situations would give rise to automatic resulting trusts?
- failure of trust for uncertainty of objects on transfer
- failure of trusts for uncertainty of subject matter on transfer
- failure of trust for non-compliance with beneficiary principle on transfer
- failure to comply with 125 year statutory perpetuity period with no gift over
- failure of non-charitable purpose trust because
What happens if trust fails due to lack of constitution (ie legal title has not passed to trustee)?
Nothing - the settlor still has both legal and beneficial interest in the property
What happens if self-declaration trusts fail due to uncertainty of objects or subject matters?
Trust will not take effect. Settlor still full legal and beneficial owner of the property
What happens if a testamentary trust fails for uncertainty of objects or subject matter?
No resulting trust. Property will form part of the testator’s residue
What happens if the property is left to an individual in a Will and it is concluded that there is insufficient certainty that person was intended to hold property as trustee?
Deemed to be outright gift to that individual
What presumption arises where a transfer of property is made gratuitously and there is no evidence that the transferor intended the recipient to receive the property as a gift?
Presumption that the transferor intended to create a resulting trust
Have can the presumption that the transferor intended to create a trust on a gratuitous transfer be rebutted?
By presenting evidence that the transferor’s actual intention is inconsistent with the creation of a trust
What presumption arises where a person pays all or part of the purchase price for an asset with legal title held by another person?
Presumption that the person who holds legal title, holds property on trust for the person who paid the purchase price
What presumption arises where two or more people both contribute towards the purchase price of an asset, regardless of how legal title is held?
Each party will be deemed to have an equitable interest in the property that reflects their respective contributions unless there is evidence of contrary intention
What is the effect if the transfer gives rise to the presumption of advancement?
Means there is no presumption of a resulting trust but instead presumption that transfer is intended to be a gift
When will presumption of advancement arise?
- transfer of property from husband to wife (including in engagement period) but no presumption the other way ie wife to husband
- from parent to child - certainly if by father less certain if by mother
- from person to a minor child where person has assumed financial responsibility of a minor child
