resulting trust


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resulting trust

A trust that is implied by law as necessary to carry out the true intentions of the parties involved. It typically arises when one transfers legal title to another for various reasons, but both parties intended the grantor to retain all benefits from the property. If an elderly person transferred her home to a child as an estate planning tool,but continued to live in the residence,the law would not allow the child to sell the home and keep the proceeds. It would, instead, impose a resulting trust.Contrast with a constructive trust.

References in periodicals archive ?
One of the arguments that the bank put forward was that an equitable interest arose in its favour under a resulting trust. Lord Browne-Wilkinson held that a resulting trust arises in two sets of circumstances: (50)
presumption of resulting trust based on contribution to the purchase
(171) Therefore, as Millett explains, in the domestic law, "a retransfer in specie after rescission is best regarded, not as a consequence of a constructive trust or resulting trust, nor as a response to unjust enrichment, but as part of the working out of the equitable remedy of rescission, which is tightly controlled and subject to its own defences." (172)
RESTATEMENT (THIRD) OF TRUSTS is more likely to settle for an explicit presumption against the resulting trust, with the presumption to be more difficult to rebut as time passes, and to become conclusive after twenty-one years (by analogy to a perpetuities period without measuring lives, even though reversionary interests are not subject to the common law rule against perpetuities).
As a general rule, where the focus is on the parties' direct financial contributions to the purchase price, a resulting trust analysis will follow.
The distinction between resulting trusts and constructive trusts appears to be waning, and courts are simply declaring a trust to be in existence.
Birks takes the view, relying on Robert Chambers' work, Resulting Trusts, (124) that the case law should be divided into two broad categories:
The IRS ruled that a resulting trust was created and the trust assets were not includible in her estate.
For instance, while a maximum TPT credit may be generated by providing the transferee spouse with all trust income annually for life in all resulting trusts for which the QTIP election is not made (i.e., the CST and non-QTIP electing portions of the marital trust(s)), more often than not clients would rather the trustees be allowed to "sprinkle" trust income among their surviving spouses and other beneficiaries.
2642(a)(3).13 A trustee may make a qualified severance of a trust at any time, and the resulting trusts are treated as separate trusts for GST tax purposes.
Regulations provide that, with respect to a qualified severance of a trust with an inclusion ratio greater than zero and less than one, one or more resulting trusts must be funded with an amount equal to the GST applicable fraction (used to determine the GST inclusion ratio for the original trust immediately before the severance) times the value of the original trust on the date of severance.
The Supreme Court of California found that "courts should enforce express contracts between nonmarital partners, [and] [i]n the absence of an express contract, the courts should inquire into the conduct of the parties to determine whether that conduct demonstrates an implied contract, agreement of partnership or joint venture, or some other understanding between the parties." (18) The court also suggested the use of constructive or resulting trusts, quantum meruit, and "additional equitable remedies to protect the expectations of parties to a nonmarital relationship in cases in which existing remedies prove inadequate." (19)