As a result, while Section 541(a)(1) includes all of a debtor's legal or equitable interests as property of the estate, Section 541(d) operates to exclude those equitable interests for which a debtor holds only bare legal title. Mashburn v. Arzate (In re Arzate), 618 B.R. 535, 541 (Bankr. W.D. Okla. 2020).
Property that is subject to a constructive or resulting trust is not property of the bankruptcy estate. See e.g. In re Arzate, 618 B.R. 535, 541 (Bankr. W.D. Okla. 2020); Inre Halverson, 151 B.R. 358, 362 n. 6 (M.D. N.C. 1993) (Section 541(d) states that property of which the debtor only has legal title and not an equitable interest only becomes property of the estate to the extent of the debtor's legal title but not the extent of any equitable interest in such property that the debtor does not hold); In re Unicorn Computer Corp., 13 F.3d 321 (9th Cir.1994); In re Foos, 183 B.R. 149, 156 (Bankr. N.D.Ill. 1995), (quoting Inre N.S. Garrott & Sons, 772 F.2d. 462, 466 (8th Cir. 1985)) ("Where the debtor's interest in property is limited to that of a trustee, no other interest (specifically, the beneficiary's equitable interest) in that property becomes part of the estate... That is, 'where the debtor holds bare legal title without any equitable interest, the estate acquires bare legal title without any equitable interest
In such a case, a trust is implied or results in favor of the person for whom the equitable interest is assumed to have been intended, and whom equity deems to be the real owner.'” Id. (quoting Mashburn v. Arzate (In re Arzate), 618 B.R. 535, 541 (Bankr. W.D. Okla. 2020)). The court found, under the undisputed evidence in that case, that a resulting trust had been created and that the property that was the subject of a resulting trust did not become property of the debtor's bankruptcy estate.
Under Oklahoma law, the Trustee's position as a bona fide purchaser is subject to the state's constructive notice law. Goddard v. Heldt (In re Heldt), 528 Fed.Appx. 779, 780 (10th Cir. 2013); Watkins v. Watkins, 922 F.2d 1513, 1514 (10th Cir. 1991) (a bankruptcy trustee is considered a BFP of a debtor's real estate under § 544(a)(3), though interpreting Oklahoma law as applying a constructive notice standard to determine BFP status under that section); Mashburn v. Arzarte (In re Arzarte), 618 B.R. 535 (Bankr. W.D. Okla. 2020); Soulé v. Gragg (In re Harrison), 503 B.R. 835, 842 (Bankr. N.D. Okla. 2013); Big Four Petroleum Co. v. Quirk, 755 P.2d 632, 634 (Okla. 1988) (to obtain status of a BFP under Oklahoma law, a purchaser must take the property with the "absence of notice, actual or constructive, of outstanding rights of others"). In Oklahoma, "[c]onstructive notice is notice imputed by the law to a person not having actual notice."
However, several courts have held that a bankruptcy trustee's powers as a bona fide purchaser can trump the rights of the beneficiary of the resulting trust. See, In re Neundorf, 2022 WL 198858 at *5, 2022 Bankr. LEXIS 91 at *12 (Bankr. W.D. Okla. Jan. 13, 2022)(Section 544(a)(3) "includes the right to obtain title to property free of certain unrecorded legal or equitable interests."); In re Arzate, 618 B.R. 535, 543 (Bankr. W.D. Okla. 2020)("If a resulting trust is established, the rights of a trustee as a bona fide purchaser trump those of the beneficiary of the resulting trust.");