We examine shape optimization problems in the context of inexact sequential quadraticprogramming. Inexactness is a consequence of using adaptive finite element methods (AFEM)to approximate the state and adjoint equations (via the dual weightedresidual method), update the boundary, and compute the geometric functional. We present anovel algorithm that equidistributes the errors due to shape optimization anddiscretization, thereby leading to coarse resolution in the early stages and fineresolution upon convergence, and thus optimizing the computational effort. We discuss theability of the algorithm to detect whether or not geometric singularities such as cornersare genuine to the problem or simply due to lack of resolution – a new paradigm inadaptivity.