Under a trust, there are 2 types of interest in trust property that the parties to the trust instrument will acquire. A trustee has a “legal interest” in the trust property and the power to deal and invest the trust property, subject to the terms of the instrument that created the trust. A Trustee is compelled in equity to administer the trust property in accordance with the trust instrument for the benefit of the beneficiaries to the trust and have strict fiduciary obligations.
The beneficial (or equitable) interest in the trust property is held by the beneficiaries of the trust. The beneficial interest entitles the beneficiary to enjoy the beneficial interest and enforce the trust under the terms of the instrument. This means that, although the beneficiaries do not have the power to deal with the property, they have a degree of control of the property in that the trustee must act in their best interest and in accordance with the trust instrument.
which is held by the trustee.