Which type of trust arises by operation of law; terms and conditions are developed from the intent of the parties?

• A. Express Trust
• B. Resulting Trust
• C. Trust Agreement
• D. Implied Trust

Answer: (D)

Trusts that come into being not by a written declaration but by the court’s recognition of the parties’ underlying intent are created by operation of law. In an implied trust, there isn’t a formal instrument laying out the terms. Instead, the court looks at the relationship, contributions, and actions of the parties to infer what the trust should accomplish and who should benefit. The terms—such as who is supposed to benefit and under what conditions—are filled in based on what the parties intended, as evidenced by how the property was handled and the circumstances surrounding its transfer. This distinguishes implied trusts from express trusts, where the terms are explicitly stated in a trust document, and from other constructs that rely on particular factual triggers. A common illustration is when one person pays for property that is titled in another’s name; the law may impose an implied trust to reflect the payer’s intent to benefit themselves or another, rather than a formal declaration of trust.