Purchase Money Resulting Trusts

There are a few different types of resulting trusts that could show up in a trusts essay on the essay section of the UBE.  The one I'd most expect to see is a purchase money resulting trust.

You should consider a purchase money resulting trust whenever a person (call him "x") furnishes consideration for the acquisition of real or personal property, but with x's consent title is taken in the name of another person (call him "y"). No trust has actually been created in the traditional sense, but the idea here is to presume that if the facts are as stated above, then x is the beneficiary of a trust and that y is a trustee of a trust and is merely holding the property for the benefit of x.  For a purchase money resulting trust to be presumed, the consideration paid by x for the purchase of the property must be supplied at or before the time that y takes title to the property.

The burden will be on x to prove by clear and convincing evidence that he supplied the consideration.  Once x has met this burden, a resulting trust will be presumed. Y can then rebut by showing that no trust was intended. Y might, for example. present evidence that the payment from x was a gift or a loan to y to satisfy a debt that x owed to y.

An exception to keep in mind is where there is a close personal relationship between x and y. In that case it will be presumed that there was a gift from x to y and no trust will result. As with the above, this presumption is also rebuttable, this time by x. "Close personal relationship" can be be tough to define, but the notes indicate that a parent, grandparent or spouse would satisfy the definition, whereas an uncle, aunt, brother, sister, child, or grandchild would not.