An implied trust is a type of situation that arises when the courts find evidence that there is a basis for what amounts to a trust after reviewing the types of arrangements put in place by a grantor. Not considered a formal trust arrangement, the implied trust is supported by the collection of financial plans and preparations made by the grantor to provide for loved ones once he or she passes away. A court will look at the cumulative evidence and, if the information meets the criteria of an implied trust, will proceed with the settlement of the estate accordingly.
Within the broad definition of an implied trust, several types of trust arrangements may emerge. One of these forms is known as a statutory trust. With this arrangement, the trustee associated with the will or other documents left behind by the grantor is charged with the responsibility of selling properties related to the estate, with the proceeds from those sales ultimately going to a beneficiary. In the interim, the trustee manages the property, which may be in the form of real estate holdings, or some sort of business operation. The idea is to hold onto the property and secure the best possible price for the holdings allowing the beneficiary to receive more benefit from the arrangement in the long run.
Another form of the implied trust is the resulting trust. With this arrangement, someone has received one of the assets associated with the grantor without actually tendering any type of payment for that asset. As the court reviews the financial affairs of the grantor, including the text of all wills and other legal documents, it may be determined that the grantor had no apparent plans on transferring ownership of that property to the current holder. With that in mind, the court will order the return of the asset to the estate, where it can then be awarded to beneficiaries based on the final decisions of the court.
The constructive trust is also a type of implied trust and tends to focus on situations in which certain parties generate benefits from assets to the detriment of those who are considered to be proper beneficiaries. This may occur when due to a series of events, those parties receive possession of those assets, with or without some sort of title, instead of the intended beneficiaries. The events involved may be due to deliberate actions to defraud, or have to do with actions taken with no real intent to deceive or defraud. In this type of situation, a court will review all the relevant information, determine if a constructive trust does in fact exist, then order that the asset and any proceeds generated up to that point be forwarded to the proper beneficiary.
