Implied Trust

An implied trust is a type of trust that arises automatically by operation of law to reflect the intentions of the parties involved, often inferred from their actions or conduct. This form of trust exists to prevent unjust enrichment or to achieve fairness in the distribution of assets when no formal trust has been established.

The concept of implied trusts has its roots in equity, where courts sought to prevent unjust enrichment and ensure fairness in property dealings. Historically, these trusts emerged to recognize the intention of parties when explicit agreements were not present.

In modern law, implied trusts are frequently applied in cases involving property co-ownership where one party holds legal title but another party may have contributed to the property’s acquisition or improvement. Courts will impose an implied trust to reflect the parties' actual intentions and prevent one party from benefiting at the expense of the other.

• If two parties purchase real estate and one party provides all the funding while the other holds title, the court may impose an implied trust to ensure that the non-funding party does not unjustly benefit.
• In a situation where a parent holds a bank account for a child, courts may impose an implied trust if it is determined that the funds were intended for the child despite the parent being the account holder.

• Mills v. Mills (1938)