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Beneficial interest

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Title: Beneficial interest  
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Subject: Property law, Contract law, Uniform Commercial Code, Third-party beneficiary, Index of law articles
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Beneficial interest

A beneficial interest is "that right which a person has in a contract made with another" (third) person. [1] The typical example is "if A makes a contract with B that A will pay C a certain sum of money, B has the legal interest in the contract, and C the beneficial interest." [2]

More generally, a beneficial interest is any "interest of value, worth, or use in property one does not own," for example, "the interest that a beneficiary of a trust has in the trust." [3] More specifically, it could be:

  • "A property interest that inures solely to the benefit of the owner," or
  • Property that "remains of an estate after the payment of debts and the expenses of administration", or
  • The right of a person having a power of appointment to appoint himself." [4]

Black's Law Dictionary defines beneficial interest as "Profit, benefit or advantage resulting from a contract, or the ownership of an estate as distinct from the legal ownership or control." [5] [6] Examples of beneficial interests in mining claims include unrecorded deeds and agreements to share profits, but not mortgages and other liens.[7] [8] A beneficial interest is also "distinguished from the rights of someone like a trustee or official who has responsibility to perform and/or title to the assets but does not share in the benefits." [9]


  1. ^ The 'Lectric Law Library's Lexicon
  2. ^ Id., The 'Lectric Law Library's Lexicon
  3. ^ Ballentine's Law Dictionary, p. 48 (Legal Assistant edition, 1994).
  4. ^ Id., Ballentine's Law Dictionary, at 48.
  5. ^ Ontario Government web site, citing Black's Law Dictionary, at p. (page needed).
  6. ^ Law Dictionary, same.
  7. ^ Ontario Government web site
  8. ^ Cf. definition of real property as including mortgages and other liens.
  9. ^ Law Dictionary.

See also

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