Opinion ID: 2198154
Heading Depth: 1
Heading Rank: 2

Heading: Resulting Trust: Presumption of a Gift

Text: A resulting trust is an equitable remedy by which a court of equity may give effect to the intentions of the parties to a transaction. [6] As a general rule, equity will presume, absent contrary evidence, that the person supplying the purchase money for property intends to retain a beneficial interest in the property and that title is placed in the name of another for some incidental reason. [7] The court therefore may impose a resulting trust requiring the person with legal title to hold that title for the benefit of the person supplying the purchase money. A resulting trust thus is not a trust at all. It is an equitable remedy designed to prevent unjust enrichment and to ensure that legal formalities do not frustrate the original intent of the transacting parties. [8] In Hudak I, we held that when the person supplying the purchase money is a parent who places legal title to property in the name of a child, the opposite legal presumption arises. That presumption, which is rebuttable, is that the parent intended to make a gift of the property to the child and did not intend to retain an ownership interest in the property. [9] This presumption is founded on the premise that people generally intend to transfer legal title to close family members only when they wish to make a gift. [10] The person against whom the presumption operates, i.e. the donor parent, must produce clear and convincing evidence to rebut the presumption of a gift.