Trusts Arising by Operation of Law: Implied Trusts Flashcards
What happens to a trust when a resulting or constructive trust arises?
The trust will end because there are no named beneficiaries, and a trustee has no duties except to transfer legal title to those who should hold it.
What is a resulting trust?
A resulting trust arises when an express trust makes an incomplete disposition of assets or fails after property has been conveyed to the trustee.
Who holds the equitable interest in a resulting trust?
The only person left holding the equitable interest is the settlor, in an equitable reversion.
Fill in the blank: A resulting trust is also known as an _______.
equitable reversion.
What occurs when a settlor transfers property to a trustee without naming a beneficiary?
Settlor is the beneficiary under resulting trust.
In a resulting trust, what happens when the named beneficiary dies?
The trustee will transfer title to the settlor, and the titles will merge.
What is a Purchase Money Resulting Trust?
A rebuttable presumption that the grantee holds the property in a resulting trust for the payor if the payor pays the original purchase price but directs title to another’s name.
True or False: A gift is presumed when title goes to a close relative.
True.
True or False: A gift is presumed when title goes to a stranger, indicating a purchase money resulting trust.
False.
What is a constructive trust?
An equitable remedy whereby a trust is erected on the holder of specific property to redress wrongdoing or prevent unjust enrichment.
When is a constructive trust typically imposed?
When property has been wrongfully obtained.
What is the purpose of a constructive trust?
To oblige the holder of the title to divest himself of it and transfer it to the person entitled to that asset.
Fill in the blank: A constructive trust is a _______ event and not a volitional choice of the parties.
forced.
What triggers the creation of a constructive trust?
Wrongful obtaining of property, such as by a slayer or frauder.
