When someone sets up a trust, things do not always go to plan. The trust may be void for uncertainty, fail the beneficiary principle, or simply leave part of the beneficial interest unaccounted for. Equity refuses to let the trustee keep that property for themselves, so it sends the interest back to the person who provided it. As a solicitor, recognising this 'result back' helps you advise on who really owns property when a trust breaks down or runs its course.
This lesson builds your understanding step by step:
- Resulting Trusts: Nature and Categories — what a resulting trust is, and the split between automatic and presumed resulting trusts.
- Automatic Resulting Trusts — how they arise when a trust fails or the beneficial interest is not fully disposed of, the common categories of failure that trigger them, and what happens to surplus funds left after a purpose trust ends with no gift-over.
By the end, you will be able to spot when an interest results back to the settlor and explain why, using the same reasoning equity applies in practice.