Equitable Interest Law and Legal Definition

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. The asset in the trust isn't titled to the beneficiary until it's distributed to the beneficiary. However, the beneficiary may have a claim against a trustee who misuses the asset, since the equitable interest gives the beneficiary has standing to sue the trustee.