What is a resulting trust? A resulting trust is a device that is created by North Carolina courts to prevent an abuser from wrongfully buying property for herself with a victim’s money. The abuser acquiring the property should not benefit from it. The purchase price comes from the victim and is intended for his benefit, not the abuser. If there is a resulting trust, the abuser is required to turn the property over to the victim. Because the victim paid for the property intended for his own enjoyment, the court will make the abuser give it to him.
For example, Victor gives to Alvin $150,000.00 with the intention that Alvin use the money to buy Victor a house. Alvin takes the money from Victor and uses it to buy the house Victor wants. However, instead of turning over the house to Victor, Alvin puts the deed to the property is his own name keeps the house he bought with Victor’s funds. Alvin prevents Victor from being able to enjoy what should be Victor’s property. Alvin now holds the property in a resulting trust for Victor, and must turn the property over to him.
Resulting trusts often arise in cases of abuse by trustees and powers-of-attorney, although those relationships are not required to prove a resulting trust. To prove a resulting trust, a victim must prove four elements by clear, strong, and convincing evidence. Clear, strong, and convincing evidence is a higher burden of proof than most civil cases require. The four elements for a resulting trust claim are:
(1) The victim must prove that the abuser acquired the property at issue in the case. This can be either real property, such as real estate, or personal property.
(2) The victim must prove that he paid the purchase price or entered into an agreement to pay at or before the time the abuser acquired the property. The victim must pay the purchase price before the abuser buys the property, unless the victim had agreed to pay before the purchase. The abuser must also use the money provided by the victim to purchase the property. If the abuser uses different money, then there is no resulting trust.
(3) The victim must prove that the victim intended that the abuser purchase the property for the victim’s benefit. The victim always intended that he get the property after purchase, not the abuser.
(4) The victim must prove that the abuser has prevented the victim from enjoying the property as the victim is entitled to do. The victim should be able to enjoy the property, but the abuser keeps him from being able to do so.
Resulting trusts can pose difficult and complex legal questions. Attorney Kirk Sanders at Hendrick Bryant has experience dealing with resulting trusts and other issues that arise in cases of fiduciary abuse and will contests. If you have a fiduciary abuse or will contest matter, contact the North Carolina fiduciary litigation attorneys at Hendrick Bryant today at (336) 723-7200.
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