Resulting trust

A resulting trust (from the Latin 'resalire' meaning 'to jump back') is the creation of an implied trust by operation of law, where property is transferred to someone who pays nothing for it; and then is implied to have held the property for benefit of another person. The trust property is said to "result" back to the transferor (implied settlor). In this instance, the word 'result' means "in the result, remains with", or something similar to "revert" except that in the result the beneficial interest is held on trust for the settlor. Not all trusts whose beneficiary is also the settlor can be called resulting trusts. In common law systems, the resulting trust refers to a subset of trusts which have such outcome; express trusts which stipulate that the settlor is to be the beneficiary are not normally considered resulting trusts.

The beneficial interest results in the settlor, or if the settlor has died the property forms part of the settlor's estate (intestacy). It remains with the person and Re Vandervell case has proven that only the Beneficial interest disappears but not the beneficiary interest.

Some jurisdictions may establish a rebuttable presumption of gift for property transfers between relatives. The presumption may operate as an affirmative defense to a petition to establish a resulting trust implied by operation of law.

The law presumes that it is legitimate to transfer property to a family member, particularly for a relative's support. But an unrelated transferee who receives substantial value without consideration is ordinarily presumed to hold the property in trust for benefit of the transferor. The rebuttable presumption of gift affects transfers between siblings, uncles, aunts, children, and grandchildren.

A notable exception to the presumption of gift is the transfer of property between husband and wife (transmutations). The marital exception to presumption of gift arises from the fiduciary duty that spouses owe to one another. Spouses have a special trusted relationship that imputes an obligation of utmost good faith and fair dealing. Accordingly, spouses are deemed incapable of transmutation except under specified circumstances, such as when making an EXPRESS DECLARATION of transmutation as by clear statement in a deed or other writing of substantial dignity.

In a common law system, 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. Where a transferor has transferred property for an unlawful purpose, and gained the benefit, then a court might hold that he has waived his right to claim a resulting trust(i.e.:settlor)(inter vivos). In such situations, a court balances the transferee's unjust enrichment with the enablement of cheating by the transferor. Enabling a cheater to gain from his transaction would erode the legitimacy of the court.

...
Wikipedia