Equitable title definition
/What is Equitable Title?
Equitable title is the right to the use and enjoyment of assets. The concept often refers to having a financial interest in a property, even if title to it is held by another party. This situation most commonly arises in a trust, where the trustee holds title to property in the trust until a later date, when the property is transferred to one or more beneficiaries. During the trust period, the trustee holds legal title to the property, while the beneficiaries have equitable title in the property. As such, the beneficiaries have a right to any gains in value triggered by the appreciation of the property during the period of the trust.
As another example of equitable title, a property investor may hold equitable title in a property, but not legal title, which is held by the party that purchased the property on behalf of the investor.
Equitable Title vs. Legal Title
Equitable title is someone’s right to use and enjoy property, while legal title is the actual ownership of the property. Further, someone who has legal title to property also has the right to transfer the ownership of it to another party, which someone with equitable title cannot do.