Bona fide purchasers and creditors protected · as in force on May 31, 2026
§ 7-3.2 Bona fide purchasers and creditors protected
An express trust not declared in the disposition to the trustee or an implied or resulting trust does not defeat the title of a purchaser from the trustee for value and without notice of the trust, or the rights of a creditor who extended credit to the trustee in reliance upon his apparent ownership of the trust property.
An undisclosed express trust or an implied or resulting trust does not defeat a good-faith purchaser’s title when the purchaser paid value without notice. ★ It also does not defeat rights of a creditor who relied on the trustee’s apparent ownership when extending credit.
Marked in the text: penalties, time limits, sums of money. Editorial emphasis added by this edition; it does not appear in the statute as enacted.
This provision appears in Volume 1 — The Surrogate's Court in Plain English; Volume 3 — The Surrogate's Court: Court Rules & the EPTL; Volume 5 — Your Career: Surrogate's Court in Plain English.