What is the difference between legal title and equitable title?
Legal title and equitable title are different types of ownership rights that a person may have over a property. Legal title is the legal and technical form of ownership of a property. It is the most stable form and gives an individual the right to enjoy said property without interference from other parties. Legal title is typically obtained by purchasing, inheriting or otherwise acquiring a property either through a sale, gift or lease. Equitable title, on the other hand, is the right to have a property transferred to another person or entity, even though they do not own the legal title. It gives the holder the right to possess, use and enjoy the property, but with restrictions. This type of title is most commonly found in trusts, where the designation of a trustee is responsible for administering the trust and can transfer the property to a beneficiary. In California, equitable title is often used to protect the interests of a beneficiary in an estate, particularly if that beneficiary is a minor or mentally disabled. By placing legal title into equitable title, the beneficiary is entitled to the full use of the property but not necessarily the legal title. The transfer of equitable title may also be done through a will, or it may come from court orders, such as an order for a sale of a property to a specific beneficiary.
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