California Partition Law Blog
Trusts are an important way to set out one’s wishes for how and when you want to transfer assets like property. While trusts usually are set up as written contracts, other trusts can be enforced by the court, like resulting trusts and constructive trusts. These types of trusts are involuntary, meaning a court imposes them as a remedy to prevent an inequitable result, when property is wrongfully taken or transferred. (Kenneally v. Bank of Nova Scotia (2010) 711 F.Supp.2d 1174, 1190.) A resulting trust may arise where the transferor did not want the transferee to have a beneficial interest in the property. A constructive trust is used by the court to prevent unjust enrichment.
What are some similarities between resulting and constructive trusts?
Both resulting and constructive trusts are involuntary because they are imposed by the court to reach an equitable result. (In re Raymond Renaissance Theater, LLC (Bankr. C.D. Cal. 2018) 583 B.R. 735, 746.) Because they are imposed by the court and not preexisting or stemming from a contract, they are exempt from the Statute of Frauds. This means there is no writing requirement for the trust to be enforced. (Martin v. Kehl (1983) 145 Cal.App.3d 228, 238.) They both have a similar purpose in identifying and then enforcing beneficial rights in property for a third party. (Holder v. Williams (1959) 167 Cal.App.2d 313, 315-316.)
A lis pendens is a notice that a lawsuit has been filed against real property which could affect that property’s title. The lis pendens notifies any potential buyer that there is a lawsuit involving a real property claim. This is important because a potential buyer with knowledge of the lis pendens will be bound by the court’s eventual judgment on the lawsuit.