Beneficial interest

From Lawiki - The law notes repository
Jump to navigation Jump to search
Lawiki for and by law students - find us on Facebook if you want to help us edit this Law Wiki.

Not professional advice - LAWIKI cannot guarantee the validity of any information

In the law of trusts, a 'beneficial interest' in some property (of any type) implies a right to use and enjoy that property (typically) as the possessor of the interest sees fit. Where one person holds property on trust for another, the latter is ascribed a beneficial interest in that property even though its legal title remains vested in the former.

The term 'beneficial interest' is nearly (but not completely) synonymous with 'equitable interest'. Some writers -- particularly those who discuss other areas of the law -- will sometimes use this term to signify both legal and equitable rights, which may lead to confusion. In the law of contracts, for example, a beneficial interest might well be described as 'that right which a person has, by means of mutual agreement and a proper exchange of valuable consideration, effectively created in concert with another'. Be that as it may, in the relatively narrow context of trust law, an individual is said to possess a beneficial interest in some property or other when he has a right to its use and enjoyment; possession of the legal title is another matter entirely.

In sum, a beneficial interest is any interest of value, worth, or use in property that one does not have a legal title to, for instance, the interest that a beneficiary has in a trust.

Trust Law