Resulting trusts-trusts laws and accounts, Financial Accounting

Resulting trusts

Resulting trusts occur where equity regards the property which is held by a trustee as belonging in equity to the person who transferred it to, or caused it to be vested in, the trustee.
 
They may arise in four situations -
 
1. Purchase of property by one person in the name of another:

  1. Where a person buys land or pure personalty and has it conveyed into the name of another, or into the joint names of himself and another, there is a presumption that the property is held on trust for the person supplying the purchase money;
  2. If two people advance money to purchase property, but the conveyance is taken in the name of one only, the other takes a beneficial interest in the property in proportion to the money advanced by him.

 

In some cases the relationship between the two parties will raise a presumption of advancement which displaces the presumption of a resulting trust i.e where the person supplying the purchase money is under an obligation to maintain the other e.g. a father or a husband.
 
2. Voluntary transfer of personal property by the owner into the name of another or into their joint names (e.g Re Vinograndoff).

3. Failure to exhaust the beneficial interest. The settlor fails to dispose of the whole of the beneficial interest in the trust fund.  The undisposed of part is held by the trustees on resulting trust for the settlor or his estate (Re Abbots Fund).

 4. Where a private express trust fails for uncertainty of objects or for non-compliance with statutory formalities there will be a resulting trust in favour of the settlor.

Posted Date: 12/13/2012 6:09:08 AM | Location : United States







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