Estate Planning Lawyer Los Angeles

Resulting Trusts

A Resulting Trust is an arrangement whereby one person holds property for the benefit of another.

To understand a Resulting Trust, however, it is first essential to understand an Implied Trust.

An Implied Trust is a Trust that arises by inference; the trustor’s intentions are speculated upon, and using the trustors conduct, actions, words, relationships, etc., a conclusion is drawn.  First, however, an intention on behalf of all concerned parties to create a Trust in the first place has to be reasonably proven to exist.  How is it “reasonably proven”?  The Implied Trust is drawn from the trustor’s un-expressed, presumed intentions.  Ultimately the Implied Trust is enforced by a court of law.

The court determines that although a formal Trust did not exist, there was nevertheless an intention on the part of the trustor (or holder of the asset) that a particular asset be used for a particular purpose or gifted to a particular person.

An Implied Trust differs from an Express Trust in that an Express Trust is in writing vs. the Implied Trust which is to be interpreted or implied from what was said or done (or not said or done, as the case may be.)

Implied Trusts fall into one of two categories: Constructive Trusts or Resulting Trusts.

A Resulting Trust is initiated by the court in cases where a person transfers property to another and gives him or her legal title to it but does not intend him or her to have an equitable or beneficial interest in the property.

A Resulting Trust is an arrangement where “Person A” holds property for the benefit of “Person(s) B”.  This Resulting trust has been established and inferred by a court in cases where a person transfers assets to another and gives him or her legal title to the assets but does not intend for that person to actually own the asset.  Think of it this way; if you were to go to Europe on vacation and gave your brother-in-law your most cherished possessions to watch over in your absence (for example, your brother-in-law was in charge of babysitting your children and house-sitting your home, and, in order to empower him to best do so, you gave him all of your pertinent information, records, health history, copies of legal documents, etc.)  The act of entrusting your brother-in-law with those items does not imply that you are giving him your home and your children.

A Resulting Trust arises via an Implied Trust when an Express Trust has failed.  A grantor transfers his property to a trustee to hold in trust for a beneficiary.  Simple enough, in theory.  If, however, without the knowledge of the grantor, the beneficiary were to die before the trust was created, the express trust would fail for want of a beneficiary.   In such a case, the trustee would then hold the property in a Resulting Trust for the grantor.