Resulting Trust

What is a Trust?

A trust usually takes the form of a written legal instrument that has an intended purpose in the distribution of money or property to someone who does not show as owner of the legal title. There are many different types of trusts some of which are not in writing. A resulting trust for example is usually not in writing and could compel the return of apparent gifts if the gratuitous transfer is challenged. Whether the gift needs to be returned or not depends on the intention of the transferor at the time of the transfer. Depending on the relationship between the transferor and transferee, different presumptions arise.

Presumption of Advancement

If you are a spouse or a minor child receiving a gift from your spouse or parent, it is presumed that the gift was made to fulfill a moral or legal obligation to provide for you. Therefore, you do not need to prove that the transferor intended to make the gift.

Presumption of Resulting Trust

On the other hand, if you are not in a spousal or parent-child relationship with the transferor, it is presumed that the gift is returnable as there is no moral or legal obligation to provide for you. However, if you can produce evidence to prove that the transferor intended to give you the money or property as a gift at the time of transfer, and the conditions of gifting are met, you may be able rebut this presumption and keep the gift.

Evidence you can adduce to rebut the presumption of resulting trust may include the transferor’s statements or acts at the time of transfer, documentation such as a deed of gift, and circumstantial evidence such as the transferee’s reaction after the transaction. The evidence in each case is very fact-specific, and the nature of the relationship and circumstances giving rise to the gratuitous transfer will be considered in its totality.

Illegal Purpose

The remedy of resulting trust may not available if a gift, including of money and land, is transferred for illegal purposes, such as tax or debt evasion.