V. Implied Trusts: Resulting Trusts and Constructive Trusts

Question 1

Resulting Trust

Answer 1

May arise upon:

1. FAILURE of an express trust; OR
2. the trust pruposes have been accomplished with trust assets REMAINING; OR
3. there arises a PURCHASE MONEY RESULTING TRUST

Question 2

Beneficiearies of a Resulting Trust

Answer 2

• any contingency contained in the trust insturment OR
• the settlor OR
• the settlro’s scucessor in interest

Question 3

Purchase Money Resulting Trust

Answer 3

Ex. A furnishes condisration for purchase of prop and titles in name of B, presumption of a purhcase money trust arises in A

• may be rebutted by the preponderance of evidence
• also is assumed to be a gift between the two if they are married or close relatives
• BFP: If sold by the personholding it in trust, and that person is a BONA FIDE PURCHASE, seller must hold that purchase price for the benefit of the original settlor
  
  • if not a BFP, settlor can take the pruchase price OR have a constructive trust imposed on home and reclaim title

Question 4

Constructive Trusts

Answer 4

IMposed wehre the person holding property cannot continue to hold it without violating a rule of equity

• meant to prevent unust enrhichment
• Person holding it wrongly made into a constructive trustee holding property in trust for the other party.
  
  • beneficiary is the person who would have been beneficiary absent trustee wrongdoing

Question 5

Constructive Trust: Scenarios

Answer 5

• FRAUD: If the holder of property came into it by fraudulent terms, than a construvitve turst may be imposed if they can prove the fraud through CLEAR & CONVINCING EVIDENCE
• SIMPLE PROMISES BROKEN: mere breahc of a simple promise DOES NOT merit a constructive trust. May sue for breahc of K or quasi K
• FIDUCIARY DUTY: constructive trust available if there is an establishable duty between the parties (e.g confidential relationship) and that duty was breached to hold the property
• UNCLEAN HANDS: no constructive trust if the claimant has unclean hands. (e.g. they wanted the property for wrongful purposes)
• BREACH OF PROMISE CONCERNING WILL: Constructive trust available despite it being the breach of a mere broken promises. Shows heightened intent for wills. (e.g scenario where A promises to take care of B if C gives him everything in his will. C does so but A does not take care of B)

Question 6

Secret and Semi-Secret Trusts

Answer 6

• SECRET TRUST: ABSENCES OF ANY TRUST LANGUAGE IN THE WILL can create a secret trust. Must arise where someone claims a trust was intended to be made.
  
  • Must estalblish that through clear and voncicing evidence that there was a trust for the court to create a constructive turst
• SEMI SECRET TRUST: PRESCEN OF TRUST LANGUAGE IN WILL:
  
  • e.g. only the enforceable duties are absent
  • if no duties exist, trust will fail