Resulting trusts

Question 1

What are the two types of resulting trusts?

Answer 1

Automatic resulting trusts
Presumed resulting trusts

Question 2

How is an automatic resulting trust formed?

Answer 2

Arises when an intended trust fails but the legal title has already passed to trustee. Equity does not know where it should go, so it gives it back to the original settlor

Question 3

How is a presumed resulting trust formed?

Answer 3

This happens where legal title is passed for no consideration but there is no evidence of a gift. Equity presumes that the transferor intended the transferee was holding the trust on behalf of themselves.