Estate Planning Newsletter

• The Cy Pres Rule
  If you create an estate planning document leaving property to a charity, but after your death the transfer cannot occur, the court may apply the cy pres rule. The words “cy pres” are French for “as near.”... Read more.
• Court-Appointed Conservators
  A “conservator” is a court-appointed individual assigned to handle the daily affairs of those who cannot care for themselves due to physical or mental limitations (the “conservatee”). Conservatorships are... Read more.
• Enhancing Retirement Lifestyles Through Reverse Mortgages
  Many are familiar with the concept of a mortgage, where an individual makes monthly payments to a lender. However, for those who qualify, there is another type of mortgage called a “reverse mortgage” (RM), where the lender... Read more.
• IRS Issues Proposed Regulations on Delaware Series LLC
  Limited Liability Companies (“LLCs”) are a form of business ownership which is a separate legal entity much like a corporation. An LLC is treated like a partnership for tax purposes and like a corporation for liability... Read more.

• Estate Planning and Business Transition Considerations for Year-End Preparations
• Estate Planning Benefits Gain Momentum
• Enjoying the Ride: Estate Planning
• Three Overlooked Benefits of Estate Planning
• Expert advice on digital estate planning

Resulting Trusts

There may be instances where property under a trust is transferred to the wrong beneficiary. This transfer can be corrected through a remedy called a resulting trust or an implied trust. Do not confuse a resulting trust, which is created by the court to remedy some error, from an express trust, which is a trust expressly created by a person (the trustor or settlor) who designates a trustee to manage assets or property for the benefit of trust beneficiaries.

When a Resulting Trust Is Imposed

A resulting trust is typically imposed by a court, and may occur under any of the following situations:

• Failure of an express trust (due to unclear intentions or inherent illegality)
• A need to determine who is to receive property that remains after an express trust has been administered and property has been distributed
• A person acquires property that was not meant to be a gift to him/her

Distinguishing Characteristics

Resulting trusts are different from other trusts, in that they are:

• Involuntary – Imposed by law, rather than being voluntarily created.
• Not a Constructive Trust – Imposed because of a good faith error, instead of the fraudulent transfer or undue influence that characterizes constructive trusts.

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