Property owners may transfer title in property to one party despite the fact that the property is meant to benefit, at least partially, another party. This often happens where one party pays for property but does not go on title because of issues with that parties’ credit. When that occurs, depending on the specific situation, the party who is not on title to the Property may attempt to seek the remedy of a resulting trust from the Court.
A resulting trust is an implied or involuntary trust arising from a transfer of property under circumstances showing that the transferee was not intended to receive a beneficial interest in the property. (Calistoga Civic Club v. City of Calistoga (1983) 143 Cal.App.3d 111; Lloyds Bank California v. Wells Fargo Bank (1986) 187 Cal.App.3d 1038.) A resulting trust is often called an “intention-enforcing” trust. (Mazzera v. Wolf (1947) 30 Cal. 2d 531, 537.) Through a resulting trust, the Court will imply an obligation on the part of the trustee, who is on title, to hold the property and eventually convey it to the owner. (In re Estate of Yool (2007) 151 Cal.App.3d 526, 531 [“The relationship between resulting trustee and beneficiary arises where one, in good faith, acquires title to property belonging to another. The law implies an obligation on the part of the one in whom title has vested to hold the property for the owner’s benefit and eventually convey it to the owner”].)
To be clear, a resulting trust is not a trust in the typical sense that people tend think of trusts. A resulting trust is not an express written trust that a settlor drafts in order to provide for the management of property. Rather, a resulting trust arises by operation of law and is a remedy that can be sought from the Court.
The attorney’s at Schorr Law, APC have handled an array of issues involving the transfer of property and the manner in which title to property is held. For a free 30-minute consultation, contact us by filling out the Contact US box on this page, calling (310) 954-1877, or emailing email@example.com