Implied Trusts

Question 1

Resulting Trusts

Answer 1

If a trust fails for want of ascertainable beneficiaries, then a resulting trust will occur where the property results back to settlor’s estate and passes according to the residuary clause or to intestate succession.
May arise upon:
1. Failure of an express trust; or
2. The trust purposes were accomplished and trust assets remain; and
3. Purchase money resulting trust

Question 2

Purchase Money Resulting Trust

Answer 2

If A furnishes the consideration for the purchase of property and then titles that property in the name of B, a presumption of a purchase money resulting trust arises in A.

• Courts imply B is a trustee and A is a beneficiary of a resulting trust
• Results from A having furnished the consideration
• May be rebutted by preponderance of the evidence

Question 3

Who are the Resulting Beneficiaries of a Resulting Trust?

Answer 3

1. Any contingency contained in the trust instrument;
2. The settlor; or
3. The settlor’s successors in interest

Question 4

Constructive Trusts

Answer 4

Constructive trusts are imposed where the person holding the property cannot continue to hold it without violating some rule of equity.

• Meant to prevent unjust enrichment
• Must be a material misrepresentation or unfair dealing

Question 5

Beneficiaries of Constructive Trusts

Answer 5

• Beneficiaries are those who would have been the beneficiaries absent the wrongdoing by the “trustee.”

Question 6

Secret Trust

Answer 6

• Where a will makes no mention of a trust, but someone alleges that T orally told them to hold the property (given by the will) as a trustee.
• Constructive trust may be imposed if it can be proven by CLEAR AND CONVINCING EVIDENCE that there was a trust

Question 7

Semi-Secret Trust

Answer 7

• There’s evidence of trust language in the will, but there are no duties named in the will.
• The trust will fail absent any duties.