What is an implied trust?

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jul 16, 2021

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An implied trust is a financial arrangement that has the characteristics of a trust without the formalities establishing one. An implied trust may not be expressly defined as a trust in a will or other legal document, rather a court determines that a trust agreement exists by looking at the nature of the arrangement the parties have made. There are three types of implied trusts: statutory trusts, resulting trusts, and constructive trusts.

Statutory Trusts

A statutory trust arises when a statute, or law, creates a trust. One type of statutory trust exists when a state’s law allows a trustee to sell a real property for a beneficiary. The trustee holds the real property until they get the best offer. The trustee then holds the funds they receive from the sale in trust for the beneficiaries. A statutory trust may involve a trustee operating a business, conducting a professional activity, or managing a real property. All of these generate income for the beneficiaries.

Resulting Trusts

A resulting trust occurs when one party receives an asset from another without paying for it, and a court determines the intent was not to transfer the property, but to have the receiving party simply hold the asset for the benefit of the person transferring it to them.  If a court finds a resulting trust, it will typically return the property to the original transferring party.

Constructive Trusts

A constructive trust is a remedy to a party improperly benefiting from an asset at the expense of a proper beneficiary that arises when a party has accidentally, mistakenly, or dishonestly received title to or possession of assets that belong to a beneficiary. Typically, a court recognizes that a constructive trust exists so it can order the first party to give the assets and any monies made from the assets to the beneficiary.  For example, say a father gives his daughter a real property to sell for the benefit of his grandson, but the daughter does not sell the property for 10 years because she cannot get a good price for it and eventually decides to keep the property for herself and rent it out for profit. If the grandson takes his mother to court, the court would likely find that the property and the rental profit was being held in a constructive trust for the grandson despite no mention of that type of distribution from the father’s original intent.  Constructive trusts exist to ensure beneficiaries are not deprived of assets intended for them.

Implied trusts require a party to prove a intended relationship exists without having an express trust agreement.  To argue an implied trust exists, consult with an experienced estate planning attorney.


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