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Simple English definitions for legal terms
accumulations, rule against
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A quick definition of accumulations, rule against:
The rule against accumulations states that if someone wants to save the income from their property to distribute it to certain people later, they can only do so within a certain time limit. This time limit is called the perpetuity period. If the accumulation of income goes beyond this period, it is not allowed.
A more thorough explanation:
Definition: The rule that states a direction to accumulate income from property, with the intention of distributing it later to certain beneficiaries, is only valid if it is limited to the perpetuity period. This rule is also known as the rule against accumulations.
Example: A wealthy individual leaves a will that directs their estate to accumulate all income from their properties for the next 50 years, with the intention of distributing it to their grandchildren after that time. However, the rule against accumulations states that this direction is only valid if it is limited to the perpetuity period, which is typically 21 years after the death of the last living beneficiary. Therefore, the direction to accumulate income for 50 years would be invalid.
Explanation: This example illustrates how the rule against accumulations limits the amount of time that income can be accumulated for future distribution. In this case, the direction to accumulate income for 50 years exceeds the perpetuity period, making it invalid. The rule against accumulations is in place to prevent property from being tied up for too long and to ensure that beneficiaries receive their rightful share in a timely manner.