Resulting Trusts

Question 1

When do resulting trusts arise?

Answer 1

1) Failure of express trusts; 2) apparent gifts; and other situations.

Question 2

What are the two types of resulting trust? Which judge made this distinction and in what case?

Answer 2

1) Automatic resulting trusts; and 2) presumed resulting trusts. This distinction was made by Megarry J (Re Vandervell’s Trust).

Question 3

What are the questions to ask when determining whether an automatic resulting trust exists?

Answer 3

1) Did an express trust fail, leaving the trustee with a surplus?; 2) did the settlor intend a gift of the surplus to the trustee?; and 3) who is the settlor?

Question 4

What are ways in which an express trust may fail? Which case illustrates this?

Answer 4

1) Trust valid, but incomplete; 2) objects invalid or missing; 3) lack of formality (Air Jamaica v Charlton).

Question 5

What are the categories of presumed resulting trusts?

Answer 5

1) Voluntary transfer presumed resulting trust, and 2) purchase contribution presumed resulting trust.

Question 6

How does a voluntary transfer presumed resulting trust work?

Answer 6

If A simply transfers property he owns to B, then that will raise the presumption that B holds the property on resulting trust for A.

Question 7

At least how many parties are needed for a purchase contribution PRT to arise?

Answer 7

Three parties.

Question 8

How does a purchase contribution PRT arise?

Answer 8

If A pays C to transfer property to B, ie buys property to be put in B’s name, then there will be a presumption that B holds the property on resulting trust for A.