Resulting and Constructive Trusts

Definition of Resulting and Constructive Trusts: These are two types of trusts recognized by the law of equity. A resulting trust arises when property is given to someone but the beneficial interest remains with the donor or someone else. A constructive trust arises when property is acquired through unconscionable conduct or a breach of trust.

Creation of Trusts: Trusts can be created in various ways, including express trusts, resulting trusts, and constructive trusts.

Requirements for Resulting Trusts: A resulting trust is created when property is given to someone, but the beneficial interest remains with the donor or someone else. There are various requirements for the creation of a resulting trust.

Requirements for Constructive Trusts: A constructive trust arises when property is acquired through unconscionable conduct or a breach of trust. There are specific requirements for the creation of a constructive trust.

Beneficiaries of Resulting and Constructive Trusts: The beneficiaries of resulting and constructive trusts may include the donor, the donee, or a third party.

Types of Property Subject to Resulting and Constructive Trusts: Certain types of property may be subject to resulting and constructive trusts, such as land, money, and other assets.

Differences between Resulting and Constructive Trusts: Although both resulting and constructive trusts involve the transfer of property, there are differences between the two types of trusts.

Remedies for Breach of Resulting and Constructive Trusts: If a resulting or constructive trust is breached, the beneficiary may be entitled to various remedies, such as an injunction or damages.

Relationship between Trusts and Other Areas of Law: Trust law intersects with several other areas of law, including property law, contract law, and tort law.

Case Law on Resulting and Constructive Trusts: There have been several landmark cases in the law of equity and trusts involving resulting and constructive trusts. Knowledge of relevant case law is essential for understanding these concepts.

Resulting Trusts: These trusts arise when property is transferred to one party, but the intention of the transferor was to retain beneficial ownership. Resulting trusts are often imposed when a person pays for property but does not take legal ownership.

Constructive Trusts: These trusts arise when property is acquired through fraud, undue influence or other wrongful conduct. Constructive trusts are imposed by the court to prevent the unjust enrichment of the wrongdoer.

Purchase Money Resulting Trusts: These trusts arise when one party contributes money towards the purchase of property, but the legal title is held by another party. The resulting trust is imposed to give effect to the parties’ intended beneficial interests.

Mutual Wills: Mutual wills are wills that are made by two or more individuals, in which they agree to leave their property to each other. A constructive trust is imposed when one of the parties attempts to break the agreement.

Half Secret Trusts: These are trusts where the existence of a trust is not disclosed in the will. The trustee is named, but the trust terms are not set out in the will. These trusts are enforceable under certain conditions.

Quistclose Trusts: These trusts are created when a lender transfers money to a borrower for a specific purpose, and the borrower uses the funds for another purpose. The lender can impose a resulting trust to recover the funds.