Define the following terms.

Question

- Implied trust
- Constructive trust
- Express trust
- Resulting trust
- Testamentary trust

Answer 1

Implied trust: Created by operation of law. Two types—resulting (property being held for the benefit of another) and constructive (preventing unjust enrichment)

Constructive trust: A trust established by a court decision that prevents unjust enrichment of the holder of the trust principal, deemed to not be the rightful owner of the property. In this instance, he or she will hold the property for the benefit of the rightful owners of the property.

Express trust: Written or oral and clearly state the purpose for which the trust is being formed.

Resulting trust: Resulting trusts arise when an express trust fails. If the trust fails, the trustee still holds the legal title to the property, but the beneficiary does not hold equitable title to the property (because the trust failed and that’s what gave the beneficiary equitable title). This leads to a situation whereby a person (the trustee),who was not meant to have the benefit and enjoyment of the property, does in fact now own the property outright without restriction. Since this was not the intent of the trustor, a court will impose an implied resulting trust on the property, so that the former trustee only holds the property for the benefit of the person to whom the benefit was intended, the former beneficiary.

Testamentary trust: Created as part of a will. Has no legal effect until the testator dies