Resulting Trusts & Trusts of the Family Home

Question 1

When is a resulting trust created?

Answer 1

Where a person transfers property to another in circumstances where it is unclear who owns the beneficial interest

Question 2

What is personalty / realty?

Answer 2

Personalty = any property other than land
Realty = land

Question 3

When does a presumption of resulting trust arise in relation to personalty?

Answer 3

If A transfers personalty they already own to B for free

Presumption of resulting trust = B holds legal title, A gets equitable interest

Question 4

When does a presumption of resulting trust arise in relation to realty?

Answer 4

Rarely - disputed if even possible

Question 5

When may there been a presumption of a resulting trust in purchase money cases?

Answer 5

1. 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)
2. 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

Question 6

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)?

Answer 6

1. Contribution must be contemporaneous with the purchase
2. Contribution must be directed towards the actual purchase price itself (e.g. payment of legal fees wouldn’t count)

Question 7

What is the presumption of advancement?

Answer 7

Presumption of a gift, which is applicable instead of presumption of resulting trust ONLY in certain situations

Question 8

When is the presumption of advancement applicable?

Answer 8

1. Father to child (minor or adult)
2. Guardian to child (usually under 18)
3. Husband to wife
4. Male fiance to female fiancee (as long as couple subsequently marry)

Question 9

How can the presumption of resulting trust or the presumption of advancement be rebutted?

Answer 9

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

Question 10

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?

Answer 10

A resulting trust is implied in favour of the settlor

Note that implied trusts can be created without any formalities

Question 11

When are rules regarding trusts of the family home relevant?

Answer 11

Cohabitants ONLY

Married couples / civil partners have statutory rules governing ownership

Question 12

How is an express trust of the family home created?

Answer 12

Evidenced in signed writing

Generally included in TR1 (if so then this is determinative)

Question 13

What elements of contribution do resulting trusts of the family home consider?

Answer 13

Financial contribution to purchase price ONLY

Question 14

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?

Answer 14

Share will be proportionate on person’s financial contribution to deposit / any initial mortgage payments at time of purchase

Question 15

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?

Answer 15

Joint and equal - an implied trust so no formalities required

Question 16

When may a common interest trust need to be claimed?

Answer 16

House legally and beneficially belongs to partner whose name is on title register

Question 17

How can a common interest constructive trust be proven?

Answer 17

1. Express common intention (e.g. some kind of agreement), or implied common intention (e.g. conduct such as financial contributions)

AND

2. 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

Question 18

How will beneficial shares be quantified in common intention constructive trusts?

Answer 18

Equity follows the law - equal shares

Question 19

What is proprietary estoppel?

Answer 19

Another method by which someone may be entitled to an interest in the family home

Question 20

What are the two stages involved in establishing proprietary estoppel?

Answer 20

1. Estoppel must be established
2. Estoppel must be satisfied

Question 21

What are the 3 key components in stage 1 of estoppel (that is must be established)?

Answer 21

1. Assurance - legal owner must have made representation / created or encouraged an expectation (active or passive)
2. Detriment - claiming party acted to their detriment in reliance upon assurance (need not be financial but must be substantial)
3. Reliance - assurance must have caused the claiming party to act to their detriment

Question 22

What can satisfy estoppel (i.e. what are the remedies)?

Answer 22

Transfer of the legal ownership in land
Grant of a lease
Some right of occupancy
Financial compensation
Beneficial share in the home