What is the meaning of resulting trust?
A resulting trust is an equitable reversion that arises by operation of law whenever a person has created an express intentional trust, but the express trust fails or does not completely dispose of the trust property.
What is an example of a resulting trust?
For example, Mahalia leaves $100,000 with her friend, Albert, while she is on a trip to Europe, asking him “to buy the old Barsallo place if it comes on the market.” Albert buys the property, but has title put in his own name, which the court will find is held in a resulting trust for Mahalia.
How does a resulting trust work?
A resulting trust is an implied trust that comes into existence by operation of law, where property is transferred to someone who pays nothing for it; and then is implied to have held the property for benefit of another person. The trust property is said to “result” or jump back to the transferor (implied settlor).
What gives rise to a resulting trust?
A ‘resulting trust’ arises when “B” has made a direct financial contribution to the purchase of the property registered solely in “A”’s name. It is important to have evidence of this payment and to show that this contribution to the purchase was not intended to be a gift or a loan.
How do you prove a resulting trust?
How do you prove a resulting trust? A resulting trust should be relatively straightforward to prove as someone can demonstrate paying money towards purchase price of the property (unlike a constructive trust which relies upon the conduct after the purchase of property).
What are the two types of resulting trusts?
Resulting Trusts
- Automatic resulting trust.
- Presumed resulting trust.
What happens when a resulting trust fails?
An automatic resulting trust will arise where the settlor transfers property to the intended trustee but the trust has failed for some reason. The trustee holds the legal title of the property on trust. The beneficial or equitable ownership is retained by the settlor.
How many types of resulting trust are there?
two forms
These trusts come in two forms: automatic resulting trusts, and presumed resulting trusts. Automatic resulting trusts arise from a “gap” in the equitable title of property.