Resulting Trusts (Problem Questions)
Resulting Trusts
*Resulting Trusts: The beneficial interest results to, or jumps back to, the settlor who created
the trust.
*-Resulting trusts properties:
1) They are created informally (s.53(2) LPA 1925)
2) Remains relevant in a variety of modern contexts.
3) Child may be a resulting trustee (Re Vinogradoff [1935])
Situations in which Resulting Trusts Arise
*-Resulting trusts arise when:
1) Where an express trust fails.
2) Voluntary Transfer/Purchase in the name of another
1) Where an Express Trust Fails
*-Where an express trust fails to dispose of the entirety of the beneficial interest, the
remainder is held by implication on resulting trust for the settlor or to establish that person
continues to hold an equitable interest in the property.
*-Comes under three categories:
a) Failure of an intended express trust
b) Incomplete disposal of beneficial interest
c) Failure to declare a trust
a) Failure of an Intended Express Trust
*-Where a failure occurs (i.e. lack of the three certainties) the property reverts back to the
settlor on resulting trust.`
-The following shows that when a transfer of property is made subject to a condition which is
not achieved the resulting trust effects a return of the property to the transferor:
Re Ames Settlement [1946]: The settlor, the husbands father, created a trust in favour of his
son which was payable a year after his marriage. The marriage took place, but was annulled
several years later. After the settlor’s later death, the husband continued to receive the sums
under the trust. The question for the court was whether the capital sum was held on trust for
the husband’s next of kin or was it instead payable under resulting trust to the settlor’s estate.
Held (Legal Principle): The marriage having been annulled (i.e. seen to have never occurred),
there had been a total failure of consideration, the trusts were void and all the sums were held
on resulting trust for the settlor’s executors.
b) Incomplete Disposal of the Beneficial Interest
*-This involves the destination of property in the event that a trust had been performed and a
surplus remains (i.e. money).
--Different policy concerns arise according to whether the trust is private or charitable.
Resulting Trusts
*Resulting Trusts: The beneficial interest results to, or jumps back to, the settlor who created
the trust.
*-Resulting trusts properties:
1) They are created informally (s.53(2) LPA 1925)
2) Remains relevant in a variety of modern contexts.
3) Child may be a resulting trustee (Re Vinogradoff [1935])
Situations in which Resulting Trusts Arise
*-Resulting trusts arise when:
1) Where an express trust fails.
2) Voluntary Transfer/Purchase in the name of another
1) Where an Express Trust Fails
*-Where an express trust fails to dispose of the entirety of the beneficial interest, the
remainder is held by implication on resulting trust for the settlor or to establish that person
continues to hold an equitable interest in the property.
*-Comes under three categories:
a) Failure of an intended express trust
b) Incomplete disposal of beneficial interest
c) Failure to declare a trust
a) Failure of an Intended Express Trust
*-Where a failure occurs (i.e. lack of the three certainties) the property reverts back to the
settlor on resulting trust.`
-The following shows that when a transfer of property is made subject to a condition which is
not achieved the resulting trust effects a return of the property to the transferor:
Re Ames Settlement [1946]: The settlor, the husbands father, created a trust in favour of his
son which was payable a year after his marriage. The marriage took place, but was annulled
several years later. After the settlor’s later death, the husband continued to receive the sums
under the trust. The question for the court was whether the capital sum was held on trust for
the husband’s next of kin or was it instead payable under resulting trust to the settlor’s estate.
Held (Legal Principle): The marriage having been annulled (i.e. seen to have never occurred),
there had been a total failure of consideration, the trusts were void and all the sums were held
on resulting trust for the settlor’s executors.
b) Incomplete Disposal of the Beneficial Interest
*-This involves the destination of property in the event that a trust had been performed and a
surplus remains (i.e. money).
--Different policy concerns arise according to whether the trust is private or charitable.
