Beneficial Interest Law and Legal Definition

Beneficial interest is a right, interest, benefit or advantage that a person enjoys from a property or trust, resulting from a contract, without actual ownership or control of the property. A beneficial interest can be distinguished from the rights of a trustee who holds legal title. A beneficiary enjoys a beneficial interest in trust property and the trustee holds a legal title. In a contract, for example, if P enters into a contract with Q that P will pay S certain amount of money, then S is entitled to a beneficial interest. In certain cases, although minors are not permitted to join partnership contracts, they are eligible to a beneficial interest in the partnership by sharing the profits, but not the losses.