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Trusts: Constructive and Resulting Trusts

Description: This quiz covers the concepts of constructive and resulting trusts in the area of Trusts and Estates Law.
Number of Questions: 15
Created by:
Tags: trusts constructive trusts resulting trusts equity property law
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What is the primary purpose of a constructive trust?

  1. To prevent unjust enrichment

  2. To manage assets for a beneficiary

  3. To provide tax benefits

  4. To create a charitable foundation

Show answer
Correct Option: A
Explanation:

A constructive trust is imposed by a court to prevent unjust enrichment when a person acquires property through fraud, breach of fiduciary duty, or other inequitable conduct.

When does a resulting trust arise?

  1. When the purchase price of property is paid by one person and title is taken in the name of another

  2. When a trust is created orally

  3. When a trust is created for an illegal purpose

  4. When a trust is created without a trustee

Show answer
Correct Option: A
Explanation:

A resulting trust arises when the purchase price of property is paid by one person and title is taken in the name of another, creating a presumption that the person who paid the purchase price intended to benefit the other person.

What is the difference between a constructive trust and a resulting trust?

  1. A constructive trust is imposed by a court, while a resulting trust arises by operation of law

  2. A constructive trust is used to prevent unjust enrichment, while a resulting trust is used to correct a mistake

  3. A constructive trust is created when there is a fiduciary relationship, while a resulting trust is created when there is a transfer of property

  4. A constructive trust is revocable, while a resulting trust is irrevocable

Show answer
Correct Option: A
Explanation:

A constructive trust is imposed by a court to prevent unjust enrichment, while a resulting trust arises by operation of law when there is a transfer of property without a clear intention to create a trust.

What are the elements of a constructive trust?

  1. Unjust enrichment, a fiduciary relationship, and a breach of duty

  2. Unjust enrichment, a transfer of property, and a lack of consideration

  3. Unjust enrichment, a mistake, and a change of position

  4. Unjust enrichment, a promise, and a reliance

Show answer
Correct Option: A
Explanation:

The elements of a constructive trust are unjust enrichment, a fiduciary relationship, and a breach of duty by the fiduciary.

What are the elements of a resulting trust?

  1. A transfer of property, a lack of consideration, and a presumption of intent

  2. A transfer of property, a mistake, and a change of position

  3. A transfer of property, a promise, and a reliance

  4. A transfer of property, a fiduciary relationship, and a breach of duty

Show answer
Correct Option: A
Explanation:

The elements of a resulting trust are a transfer of property, a lack of consideration, and a presumption of intent that the person who paid the purchase price intended to benefit the other person.

What is the remedy for a breach of trust?

  1. Rescission of the trust

  2. Damages

  3. Injunction

  4. All of the above

Show answer
Correct Option: D
Explanation:

The remedy for a breach of trust may include rescission of the trust, damages, injunction, or any other appropriate remedy.

What is the statute of limitations for a constructive trust?

  1. The same as for a breach of contract

  2. The same as for a breach of fiduciary duty

  3. The same as for a mistake

  4. There is no statute of limitations for a constructive trust

Show answer
Correct Option: B
Explanation:

The statute of limitations for a constructive trust is generally the same as for a breach of fiduciary duty, which varies by jurisdiction.

What is the statute of limitations for a resulting trust?

  1. The same as for a breach of contract

  2. The same as for a breach of fiduciary duty

  3. The same as for a mistake

  4. There is no statute of limitations for a resulting trust

Show answer
Correct Option: D
Explanation:

There is generally no statute of limitations for a resulting trust, as it arises by operation of law and is not based on a contract or a breach of duty.

Can a constructive trust be created orally?

  1. Yes

  2. No

  3. It depends on the jurisdiction

  4. It depends on the value of the property

Show answer
Correct Option: A
Explanation:

A constructive trust can be created orally in some jurisdictions, but it is generally advisable to have a written trust agreement to avoid disputes.

Can a resulting trust be created orally?

  1. Yes

  2. No

  3. It depends on the jurisdiction

  4. It depends on the value of the property

Show answer
Correct Option: A
Explanation:

A resulting trust can be created orally in most jurisdictions, but it is generally advisable to have a written trust agreement to avoid disputes.

What is the difference between a constructive trust and an implied trust?

  1. A constructive trust is imposed by a court, while an implied trust arises by operation of law

  2. A constructive trust is used to prevent unjust enrichment, while an implied trust is used to correct a mistake

  3. A constructive trust is created when there is a fiduciary relationship, while an implied trust is created when there is a transfer of property

  4. A constructive trust is revocable, while an implied trust is irrevocable

Show answer
Correct Option: A
Explanation:

A constructive trust is imposed by a court to prevent unjust enrichment, while an implied trust arises by operation of law when there is a transfer of property without a clear intention to create a trust.

What is the difference between a resulting trust and an express trust?

  1. A resulting trust arises by operation of law, while an express trust is created by a written agreement

  2. A resulting trust is used to prevent unjust enrichment, while an express trust is used to manage assets for a beneficiary

  3. A resulting trust is created when there is a transfer of property without a clear intention to create a trust, while an express trust is created when there is a clear intention to create a trust

  4. A resulting trust is revocable, while an express trust is irrevocable

Show answer
Correct Option: A
Explanation:

A resulting trust arises by operation of law when there is a transfer of property without a clear intention to create a trust, while an express trust is created by a written agreement that clearly states the intention to create a trust.

What is the difference between a constructive trust and a quasi-contract?

  1. A constructive trust is imposed by a court, while a quasi-contract is created by a court to prevent unjust enrichment

  2. A constructive trust is used to prevent unjust enrichment, while a quasi-contract is used to correct a mistake

  3. A constructive trust is created when there is a fiduciary relationship, while a quasi-contract is created when there is a transfer of property

  4. A constructive trust is revocable, while a quasi-contract is irrevocable

Show answer
Correct Option: A
Explanation:

A constructive trust is imposed by a court to prevent unjust enrichment, while a quasi-contract is created by a court to prevent unjust enrichment when there is no valid contract.

What is the difference between a resulting trust and a charitable trust?

  1. A resulting trust arises by operation of law, while a charitable trust is created by a written agreement

  2. A resulting trust is used to prevent unjust enrichment, while a charitable trust is used to benefit a charitable purpose

  3. A resulting trust is created when there is a transfer of property without a clear intention to create a trust, while a charitable trust is created when there is a clear intention to create a trust

  4. A resulting trust is revocable, while a charitable trust is irrevocable

Show answer
Correct Option: A
Explanation:

A resulting trust arises by operation of law when there is a transfer of property without a clear intention to create a trust, while a charitable trust is created by a written agreement that clearly states the intention to create a trust for a charitable purpose.

What is the difference between a constructive trust and a spendthrift trust?

  1. A constructive trust is imposed by a court, while a spendthrift trust is created by a written agreement

  2. A constructive trust is used to prevent unjust enrichment, while a spendthrift trust is used to protect the assets of a beneficiary from creditors

  3. A constructive trust is created when there is a fiduciary relationship, while a spendthrift trust is created when there is a transfer of property to a trustee

  4. A constructive trust is revocable, while a spendthrift trust is irrevocable

Show answer
Correct Option: A
Explanation:

A constructive trust is imposed by a court to prevent unjust enrichment, while a spendthrift trust is created by a written agreement that places restrictions on the beneficiary's ability to access the trust assets.

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