An automatic resulting trust is a type of resulting trust that arises automatically, without the need for any evidence of intention or agreement to create a trust. It occurs when there is a failure of a trust, or when a trust comes to an end, and the property subject to the trust is returned to the settlor.
The automatic resulting trust is based on the idea that when a trust fails or comes to an end, the property that was subject to the trust must be returned to the person who originally owned it, unless there is evidence of an intention to create a different type of trust or transfer the property to someone else.
For example, if a person transfers property to a trustee to hold on behalf of a beneficiary, but the trust fails because the beneficiary dies before the property is transferred, the property will automatically revert to the person who originally owned it. This is because there is no evidence of an intention to create a different type of trust or transfer the property to someone else. Similarly, if a trust comes to an end and there is no evidence of an intention to create a new trust or transfer the property to someone else, the property will automatically revert to the settlor.
You can learn more about this topic and relevant case law with our Equity and Trusts notes.
