resulting trusts

Question 1

how does a resulting trust arise?

Answer 1

resulting and constructive trusts arise by operation of the law.
(imposed by the court)

Question 2

what are the 3 situations when a resulting trust arises?

Answer 2

1. where a transfer on trust wholly or partially fails but the property has been transferred to the trustee
2. where a person graciously transfers property to another person
3. where a person pays all or part of the purchase price for an asset

Question 3

what is a resulting trust?

Answer 3

when property is held on trust for the person who transferred it or contributed to its acquisition.

involves the return of a beneficial interest to the original legal owner of the property or contributor to that property.

Question 4

how does an automatic resulting trust arise?

Answer 4

where there has been some sort of failure in the creation of a transfer on trust.
effectively a default position which returns beneficial interest to the sector (giving them Saunders v vautier rights) the ability is given to collapse the trust and either retain the property or re-attempt the intended express trust

Question 5

what are 4 common reasons for an automatic resulting trust to arise?

Answer 5

1. uncertainty of subject matter
2. uncertainty of objects
3. non-compliance with the beneficiary principle
4. surplus fund remaining at the end of the trust period

Question 6

what are the 3 certainties for automatic resulting trusts?

Answer 6

1. uncertainty of objects
2. uncertainty of subject matter
3. non-compliance with the beneficiary principle

Question 7

how do presumed resulting trusts arise?

Answer 7

arise in situations where a transfer is gracious and there is no evidence that the transferor intended the recipient to receive the property as a gift. arise by way of a presumption that the transferor or contributor intended to create a trust.

Question 8

how can a presumed resulting trust be rebutted?

Answer 8

can be rebutted with evidence that the transferor or contributor’s actual intention is inconsistent with the creation of a trust

Question 9

can you use a presumed resulting trust to determine the beneficial entitlement to land acquired jointly eg, the family home?

Answer 9

no - in this case you need to use the common intention constructive trust

Question 10

how can the presumption of a resulting trust be rebutted?

Answer 10

by evidence that the transferor didn’t intend the recipient to hold the property on trust for them