Resulting Trusts (non-express)

Question 1

What is a resulting trust

Answer 1

A. Resulting trust is implied by law or imposed by courts. Involves a reversionary interest.

d. 3 kinds
- - failed express trust (two kins, creation ineffective or no provision for the remainder
- purchase money resulting trust

b. Who benefits from resulting trust—
i. OR,
ii. OR’s successor in interest. Heirs or beneficiaries of will. No BE like in regular trust

c. Purpose—to do what OR would have done had he thought about it.

Question 2

Failed express trusts

Answer 2

2 situations

a. Creation ineffective
i. OR attempts to create an express trust but intent fails. If the trust is silent on what to do if it fails, then the OR retains the equitable interest, and TE holds legal title.

b. IF there’s o provision for the remainder
i. If the trust res is larger than necessary and instrument doesn’t provide for disposition of the excess-> reverts to OR or his beneficiaries.

Question 3

C. Purchase-money resulting trusts (PMRT)

Answer 3

a. Situation—when one party (BE) purchases property, but instructs the seller to transfer the property or title to someone else (TE)
For ex. Husband (BE) pays for house house, but puts wife (TE) as holder of legal title. That way, wife owns it, but husband is beneficiary and gets it when wife dies.

1. 3 possible relations
   a. OR and Trustee
   b. Donor and donee
   c. Creditor and debtor

BOP on BE (husband) to show he provided the consideration by clear and convincing standard

b. Presumption if close personal relationship bw BE and TE (husband and wife)– assume it’s a gift

Otherwise–
ii. If payor is not close relative of grantee— (for ex Husband gives legal title to a creditor)–> assume a PMRT

1. assume that the receiver was only supposed to hold the legal title
   iii. If payor expects to be repaid—assume it’s a debt

TE can rebut by showing no trust intent– like it was a gift or loan or debt