Beneficial owner
The position of the beneficial owner, by definition, is the one who has certain rights to a property, while the legal title of ownership to the property belongs to someone else.

This looks evident but a closer look may disclose some interesting situations in which „beneficiaries” play a role.

Beneficiary in property law
Beneficiaries or beneficial owners are those who have the right to use a property and obtain the profits thereof. This arrangement generally arises from the so-called tenancy for life (or for a number of years), where the rights related to ownership are divided between the tenant, who is also called beneficial owner, and the legal owner. Until the beneficial user dies, the legal owner merely has “reversion”, which is practically an expectation that the entirety of rights related to ownership will ultimately be united in the hands of the legal owner.

Beneficiary in a contract
Beneficiary also means a person who is designated to receive benefits from a legal arrangement between two or more other persons. Contracts for state support or similar instruments often name the beneficiary to whom financial benefits will be provided. It is also possible to name a third party in a contract made between two other persons or entities. In this case, the beneficiary will not be a

Beneficiary in probate law
If the instrument designating someone to receive benefits is a testamentary disposition, then the person named in such document, which is most typically a last will and testament, is the beneficiary of the will.

Beneficiary of a trust
As property can be devised to another person by a will, a trust can also be used as an instrument to vest legal title to another person. This, like a will, can be made contingent upon the death of the person making such disposition, which is called a testamentary trust, or can be used at any other time. Essentially, trust is a fiduciary relationship in which one party, known as a trustor, gives another party, the trustee, the right to hold title to property with the purpose of ultimately giving it to a third party, who is also called beneficiary in this context.

Beneficiary in an insurance policy
In the context of insurance, beneficiary is the person who receives amounts under an insurance policy of someone else. This typically happens in life insurance, where the insured will not be able to receive amounts under the insurance policy but a third person is named to be the beneficiary of all proceeds of insurance.

Beneficiary in banking
An account at a brokerage firm or financial institution is generally opened and maintained for the benefit of the owner of the funds. However, one may deposit funds in the name of another person with the purpose of hiding the ownership or even the origin of the funds and use someone with clean record to have legal ownership of the account. In this case, the beneficial owner is the real owner of funds held in the name of such other person.

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