Do you know what a resulting trust is in West Palm Beach? These are not traditional trusts but that does not mean they should go unnoticed. These answer the basic question of what happens to those trust funds when the trust is finally terminated. Do you know the Palm Beach rules on a resulting trust?
Resulting Trusts Generally
- There are three kinds of resulting trusts recognized in West Palm Beach.
- Purchase Money resulting trusts.
- Resulting trusts arising on failure of an express trust.
- Resulting trusts arising from an incomplete disposition of trust assets (i.e. excess trust funds).
Purchase Money Resulting Trusts
- A purchase money resulting trust is presumed whenever a person (beneficiary) furnishes consideration (usually money) for the acquisition of property (real or personal).
- Then with that person’s consent the property is held in the purchaser’s name.
- The burden will be on the beneficiary in West Palm Beach to show by clear and convincing evidence he furnished the consideration that paid for the asset.
- Once he proves that the resulting trust is presumed by the probate court.
- Now the person who bought the item with the other person’s money will have to show that no trust was intended (i.e. it was a gift or repayment of a loan).
- There are exceptions though when the parties are close family members a gift rather than a trust will be presumed.
- If the party provided only part of the purchase price then they will get a part trust divided pro-rata.
Resulting Trusts on Failure of an Express Trust
- If for some reason an express (traditional) trust fails there will be a resulting trust.
- For example if the beneficiaries are unascertainable or the trust is void / unenforceable the court needs to do something with that property.
- So they will create a resulting trust back to the heirs of the settlor and they will take the property as they would under a will or intestacy.
- This will be avoided when the trust specifically has a back up clause that says where the property should go should it fail
Resulting Trust Implied from Excess Trust Funds
- A resulting trust in favor of the settlor (or their estate) also occurs if the purpose of a trust is fully satisfied and there is left over money / property.
- When would that happen?
- For example if you leave ten million dollars to the city to create a planetarium and it only costs eight million the excess two million will go back to you through a resulting trust.
- If you are dead it will go to your estate/ heirs.