Resulting Trusts

A resulting trust is a somewhat complicated trust which is not formed pursuant to a formal trust document; rather, a resulting trust is an implied trust which is presumed.  Frequently, a resulting trust will be referred to as an “implied trust.”  The property in the trust is essentially held in trust for the benefit of the person who created the trust initially; this person is called the “settlor” of the trust.

How a Resulting Trust is Created

The interest which may arise out of the property in the resulting trust may benefit the settlor during his or her lifetime, or the property may simply become part of the testator’s estate upon death. Usually, the resulting trust comes into existence where there is a legal challenge to the person holding the property and it is alleged that the person is unlawfully holding title to the property.  In such an instance, if the court finds that such an allegation is true, the court will find a resulting trust.  Ultimately, the court is ruling that the person currently in title of the property is holding the property in trust for someone else: namely, the settlor or the person who originally owned the property.

Another way the resulting trust emerges is when an express trust has leftover excessive funds.  The excessive funds revert back to the settlor.  Finally, there is a resulting trust known as a “purchase money resulting trust.”  The purchase money resulting trust arises where buys a property for someone else, and that person is on the deed instead of the purchaser. Some states have eliminated the purchase money resulting trust.

Legal Help

When a resulting trust exists, the court will allocate the trust property according to the manner in which the original property owner would have wanted in such an instance.  The court will issue an order that while the current property owner is in possession or has title to the property, the property owner is holding the property in trust for the property owner.  Estate matters involving resulting trusts can be quite complicated; therefore, one should consider consulting with an experienced estate planning attorney in order to ensure that one’s legal rights are adequately protected.