Legal Definitions - Resulting Trust

A resulting trust is a type of trust that is created by law when a person creates an express trust, but the trust fails or does not completely dispose of the trust property. In this case, the property goes back to the original owner, known as the settlor.

John creates a trust and transfers his house to the trust. The trust document states that the house is to be held for the benefit of John's children. However, John only has one child and the trust document does not specify what should happen to the house if John's child dies before him. In this case, a resulting trust would be created and the house would go back to John as the settlor.

Another example would be if a person creates a trust for a specific purpose, such as to fund a charity, but the charity ceases to exist. In this case, a resulting trust would be created and the property would go back to the settlor.

These examples illustrate how a resulting trust can be created when an express trust fails to dispose of the trust property completely or when the purpose of the trust is no longer valid.