Define: Purchase Money Resulting Trust

A Purchase Money Resulting Trust is a legal concept that arises when one person purchases property using their own money, but the property is held in the name of another person. The person who provided the funds is considered the beneficial owner of the property, even though the legal title is held by someone else.

A Purchase Money Resulting Trust specifically applies to situations where property is purchased using the buyer’s own funds but held in someone else’s name. A resulting trust, on the other hand, can arise in various circumstances where property is held by one person on behalf of another, without any specific requirement of using purchase money.

To establish a Purchase Money Resulting Trust, there must be evidence that the person providing the funds intended to retain beneficial ownership of the property. This can be proven through documentation, such as a written agreement or correspondence, or through the conduct and actions of the parties involved.

While it is generally recommended to have written evidence to establish a Purchase Money Resulting Trust, it is possible for a verbal agreement to be sufficient if there is clear and convincing evidence of the parties’ intentions.

Yes, a Purchase Money Resulting Trust can be created in a family context. For example, if a parent uses their own funds to purchase a property but puts it in their child’s name, a Purchase Money Resulting Trust may arise to recognize the parent’s beneficial ownership.

Yes, a Purchase Money Resulting Trust can be challenged or revoked if there is evidence that the parties’ intentions have changed or if there are other legal grounds to do so. It is advisable to seek legal advice if you wish to challenge or revoke a Purchase Money Resulting Trust.

If the legal owner of the property refuses to recognize the Purchase Money Resulting Trust, legal action may be necessary to enforce the trust and establish the beneficial owner’s rights. This may involve filing a lawsuit and presenting evidence to support the existence of the trust.

No, a Purchase Money Resulting Trust cannot be used to avoid taxes or creditors. The beneficial owner of the property is still responsible for any applicable taxes, and creditors may still have the ability to pursue their claims against the property.

Yes, a Purchase Money Resulting Trust can be created for personal property as well, not just real estate. The same principles of using one’s own funds to purchase property held in another person’s name apply.

While it is not legally required to have a lawyer involved in establishing a Purchase Money Resulting Trust, it is highly recommended to seek legal advice to ensure that all legal requirements are met and to protect your rights and interests. A lawyer can provide guidance, draft necessary documents, and represent you in any legal proceedings if needed.