Resulting Trusts & Trusts of the Family Home Flashcards
When is a resulting trust created?
Where a person transfers property to another in circumstances where it is unclear who owns the beneficial interest
What is personalty / realty?
Personalty = any property other than land
Realty = land
When does a presumption of resulting trust arise in relation to personalty?
If A transfers personalty they already own to B for free
Presumption of resulting trust = B holds legal title, A gets equitable interest
When does a presumption of resulting trust arise in relation to realty?
Rarely - disputed if even possible
When may there been a presumption of a resulting trust in purchase money cases?
- X purchases property but arranges for it to be put in Y’s name - possible presumption of resulting trust in favour of X (i.e. Y holding legal title, X holding equitable title)
- X contributes to purchase price of a property which is put in sole name of Y (who pays remainder) - size of X and Y’s beneficial interest under resulting trust is proportionate to respective contributions
What are the 2 requirements for a presumption of a resulting trust in favour of a contribution to the purchase price of property (for both personalty and realty)?
- Contribution must be contemporaneous with the purchase
- Contribution must be directed towards the actual purchase price itself (e.g. payment of legal fees wouldn’t count)
What is the presumption of advancement?
Presumption of a gift, which is applicable instead of presumption of resulting trust ONLY in certain situations
When is the presumption of advancement applicable?
- Father to child (minor or adult)
- Guardian to child (usually under 18)
- Husband to wife
- Male fiance to female fiancee (as long as couple subsequently marry)
How can the presumption of resulting trust or the presumption of advancement be rebutted?
By evidence of intention to the contrary
Note that evidence to rebut an underlying presumption must be of the transferor’s intention before or at the time of transfer - any evidence post transfer can only be used AGAINST the transferor
What happens when property is transferred to a third party with the intention to create an express trust, but something prevents the creation of that express trust?
A resulting trust is implied in favour of the settlor
Note that implied trusts can be created without any formalities
When are rules regarding trusts of the family home relevant?
Cohabitants ONLY
Married couples / civil partners have statutory rules governing ownership
How is an express trust of the family home created?
Evidenced in signed writing
Generally included in TR1 (if so then this is determinative)
What elements of contribution do resulting trusts of the family home consider?
Financial contribution to purchase price ONLY
When establishing the share that someone is entitled to when an equitable interest in the property under a resulting trust has been established, what will the court consider?
Share will be proportionate on person’s financial contribution to deposit / any initial mortgage payments at time of purchase
If a home is owned jointly (both names on register) and no express trust created, how is it presumed that the beneficial interest is held?
Joint and equal - an implied trust so no formalities required
When may a common interest trust need to be claimed?
House legally and beneficially belongs to partner whose name is on title register
How can a common interest constructive trust be proven?
- Express common intention (e.g. some kind of agreement), or implied common intention (e.g. conduct such as financial contributions)
AND
- Claiming partner acted to their detriment in reliance on that common intention (financial contributions generally suffice, domestic contributions may also suffice but position is less clear)
NOTE that the only way of inferring common intention is through direct or possible indirect financial contributions
How will beneficial shares be quantified in common intention constructive trusts?
Equity follows the law - equal shares
What is proprietary estoppel?
Another method by which someone may be entitled to an interest in the family home
What are the two stages involved in establishing proprietary estoppel?
- Estoppel must be established
- Estoppel must be satisfied
What are the 3 key components in stage 1 of estoppel (that is must be established)?
- Assurance - legal owner must have made representation / created or encouraged an expectation (active or passive)
- Detriment - claiming party acted to their detriment in reliance upon assurance (need not be financial but must be substantial)
- Reliance - assurance must have caused the claiming party to act to their detriment
What can satisfy estoppel (i.e. what are the remedies)?
Transfer of the legal ownership in land
Grant of a lease
Some right of occupancy
Financial compensation
Beneficial share in the home
