Also known as: equitable interests · beneficial interest
Written by attorneys · grounded in primary & secondary sources — see below
An interest in property that arises under principles developed by courts of equity rather than common-law courts. It typically belongs to a trust beneficiary or a land-sale purchaser before legal title transfers. The interest carries enforceable rights in equity even though legal title remains with another party.
Ethan Evans signed a binding contract to buy a warehouse from Empire Logistics. Two weeks later a storm damaged the roof. Because the contract had already formed, Ethan bore the loss even though legal title had not yet passed. Empire Logistics held the deed only as trustee for Ethan.
Ella Emerson held an access easement across land owned by Echelon Security. Echelon built a permanent fence that blocked the easement and maintained it for the full prescriptive period. Ella's equitable interest in the servitude was extinguished by the adverse use.
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Edward Everett's will created an outright remainder for his disabled grandson. After the settlor's death, circumstances changed and the grandson needed government benefits. The court modified the trust to place the remainder in a special-needs trust, preserving the grandson's equitable interest while furthering the settlor's purpose.
Emily Ellis served as personal representative of her aunt's estate. She sold estate land to her own spouse without court approval or disclosure. A remainder beneficiary successfully voided the sale, protecting the equitable interests of all estate beneficiaries.
Elemental Pharmaceuticals purchased an option on undeveloped land. Before exercising the option the company held only an equitable interest in the parcel. That interest allowed the corporation to deal with the property under its statutory powers even though legal title remained with the seller.
Enzo Eastwood conveyed land to a trustee to hold for his niece. The niece received an equitable interest in the land even though the trustee held legal title. The conveyance was valid because statutes had not limited the purposes for which such equitable interests could be created.
A legal interest arises under common-law rules while an equitable interest arises under equity principles. Legal title usually carries the right of possession. Equitable interests give beneficial rights enforceable in equity even when another party holds legal title.
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Once a binding contract for the sale of land is formed the buyer acquires an equitable interest. The seller then holds legal title only as trustee for the buyer during the executory period.
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Yes. When a use violates the servitude and continues adversely for the prescriptive period the beneficiary's equitable interest in the servitude is modified or extinguished.
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Yes. The beneficiary of a valid trust holds an equitable interest in the trust property while the trustee holds legal title.
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Yes. Corporate statutes expressly authorize a corporation to acquire and hold any legal or equitable interest in real or personal property.
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…Law Act grants valid or putative spouses; we hold only that she has the same rights to enforce contracts and to assert her equitable interest in property acquired through her effort as does any other unmarried person. [^maj-25]: Our opinion does not preclude the evolution of additional equitable remedies to protect the…