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 equity and the law of trusts?

Equity essentially means fairness. Our legal system is based on these rules and this area of law gave birth to the law of trusts. Trust law is a set of rules that have been established to regulate situations where one person places trust in another person to look after their affairs.

What is the difference between a resulting trust and a constructive trust?

A constructive trust is a civil remedy, where a person can recover property or damages from a defendant that would otherwise be unjustly enriched by keeping the contents of the trust. A resulting trust is dictated by the court based on the conduct of the parties.

What is a resulting trust Australia?

A resulting trust may arise where a person (A) causes a property to be registered in another person’s (B) name, where A did not intend for B to become the sole beneficial owner of the property. In this scenario, where A and B are strangers, a resulting trust may be presumed.

What is an example of a resulting trust?

For example, a person purchases a farm for $100,000 and directs the seller to make the deed out to a third person. Nothing further appears concerning the purchaser’s intention, and no relationship exists between the purchaser and the third person. In this situation, a resulting trust is created.

What are the benefits of a resulting trust?

⇒ A resulting trust is always for the benefit of the original owner of the property. ⇒ Resulting trusts arise where the beneficial title in property reverts to, or never leaves, the original legal owner of the property.

How does equity law differ from common law?

In modern practice, perhaps the most important distinction between law and equity is the set of remedies each offers. The most common civil remedy a court of law can award is monetary damages. Equity, however, enters injunctions or decrees directing someone either to act or to forbear from acting.

What are the two main circumstances in which a resulting trust will arise?

‘A resulting trust arises in two sets of circumstances: (A) where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held …

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 is a resulting trust family law?

In family law, a resulting trust is a remedy which allows married and unmarried spouses whose name is not on the title of a property to share in the value of that property, where it is equitable (i.e- fair) in the circumstances to do so.

What are the two types of resulting trust?

These trusts come in two forms: automatic resulting trusts, and presumed resulting trusts.

What is a resulting trust law?

In common law jurisdictions, a resulting trust law is a creation of the law of equity, rather than of common law (in the strict sense). Accordingly, the laws of some jurisdictions might recognize equitable defenses such as laches, unclean hands, and the responsibility to do equity.

Who is the beneficial owner of equity in a trust?

The English Court of Appeal held that Mrs Hodgson remained the beneficial owner in equity, and a resulting trust existed to protect that interest.

Does the resulting trust apply to my investment property?

The resulting trust will still apply to property bought as an investment, rather than as a family home. ⇒ The exact nature of the resulting trust has been the subject of extensive academic debate over the past 25 years.

When does a loan become a resulting trust?

In Barclays Bank v Quistclose [1970] AC 567, a resulting trust was created with regard to a loan made for a specific purpose which was not carried out. It must be emphasised that in order to implement the law of trust the specific loan to the borrower must be such that the sum does not become the general property of the borrower.