What is equitable interest in a trust?

An equitable interest is an “interest held by virtue of an equitable title (a title that indicates a beneficial interest in property and that gives the holder the right to acquire formal legal title) or claimed on equitable grounds, such as the interest held by a trust beneficiary”.

Who holds the equitable interest?

An interest or right enforceable in a court of equity, protected by equitable remedies. An equitable interest is an interest in or right over property, which gives the holder the right to acquire formal legal title. The concept of an equitable interest only exists in jurisdictions with common law backgrounds.

What does it mean to hold equitable interest?

Equitable interest is a broad term that covers an interest which is established through principles of fairness, rather than a legal assignment of ownership. An example of an equitable interest is the one held by a trust beneficiary.

How do you get equitable interest?

An equitable interest can take the form of a purchase and sale contract, an option contract, a contract for deed, a lease option contract or an approval letter for a short sale, to name a few.

Is a right to reside an equitable interest?

A right to reside in a property is an equitable right to occupy the property in accordance with the conditions set out in the Will.

What does assigning equitable rights mean?

An equitable assignment is one that does not fulfill the statutory criteria for a legal assignment, but is binding and upheld by the courts in the interest of equability, justice, and fairness.

What are equitable rights and interests?

An equitable right is a legal right guaranteed by equity as opposed to a legal right which derives authority from a legal source. An example of an equitable right could be seen in Land law, where mention is made of a beneficial interest i.e. vested interests in an estate which are protected by equity.

Are equitable interests in property rights against a person or a thing?

An equitable interest arises where there is an interest in the property, but no legal title exists. However, this title is not “true ownership”, and ordinarily, this type of interest can be overridden by legal ownership. The only way an equitable interest can be enforced is by the Court.

What is equitable interest and legal interest?

What is the difference between Equitable Interest and Legal Interest? Legal interest is when a person has ownership over an asset and can legally enforce his rights over the said asset. Equitable interest is when a person can enjoy the use of the asset without legally owning it.

Who holds equitable title in a trust?

trustee
During the trust period, the trustee holds legal title to the property, while the beneficiaries have equitable title in the property.

What are equitable remedies in law?

Equitable relief, also referred to as an equitable remedy, is a type of court-ordered relief for an aggrieved party that is used when ordinary legal remedies – such as awarding damages – are considered inadequate justice for the suffering party.

What is a legal interest and equitable interest?

Equitable interests arise where there is an interest in a property, albeit the party with the interest does not have legal title. Legal title is the true and enforceable ownership of a property. This cannot easily be overridden, save for when an equitable interest exists.

Can a beneficiary of a trust have an equitable interest?

An equitable interest as a beneficiary of a trust can be contrasted to a trustee’s legal interest in the trust property, which gives them the rights and powers to deal with and invest the trust property, subject to the interest of the beneficiary.

Which is the best definition of an equitable interest?

Equitable remedies. Related. An equitable interest is an “interest held by virtue of an equitable title (a title that indicates a beneficial interest in property and that gives the holder the right to acquire formal legal title) or claimed on equitable grounds, such as the interest held by a trust beneficiary.”.

Can a person have both a legal and equitable interest in a property?

If one person has both the legal and equitable interest in the relevant property, he or she has no ‘equitable interest’ in that property as such.

What kind of interest does a trustee have in a trust?

Equity. Under a trust, the trustee has a legal interest in the trust property and all of the rights and powers that follow from that legal interest (for example, rights to deal with that trust property and to invest trust property), subject to the interest of the beneficiary and the terms of the trust (deed).