PART 1. PERPETUITIES
Section 9-1.1 Rules against perpetuities. 9-1.2 Reduction of age contingency. 9-1.3 Rules of construction. 9-1.4 Acquisitition of real property by foreign trust. 9-1.5 Trust with transferable certificates. 9-1.6 Trust for employees. 9-1.7 Trust for self-employed individuals and others. 9-1.8 Trust created by national securities exchange to assist customers of members, member firms or member corporations.
PART 2. ACCUMULATIONS
Section 9-2.1 Rules governing accumulations. 9-2.2 Anticipation of directed accumulation. 9-2.3 Undistributed income.
PART 1. PERPETUITIES S 9-1.1 Rule against perpetuities (a) (1) The absolute power of alienation is suspended when there are no persons in being by whom an absolute fee or estate in possession can be conveyed or transferred. (2) Every present or future estate shall be void in its creation which shall suspend the absolute power of alienation by any limitation or condition for a longer period than lives in being at the creation of the estate and a term of not more than twenty-one years. Lives in being shall include a child conceived before the creation of the estate but born thereafter. In no case shall the lives measuring the permissible period be so designated or so numerous as to make proof of their end unreasonably difficult. (b) No estate in property shall be valid unless it must vest, if at all, not later than twenty-one years after one or more lives in being at the creation of the estate and any period of gestation involved. In no case shall lives measuring the permissible period of vesting be so designated or so numerous as to make proof of their end unreasonably difficult. S 9-1.2 Reduction of age contingency Where an estate would, except for this section, be invalid because made to depend, for its vesting or its duration, upon any person attaining or failing to attain an age in excess of twenty-one years, the age contingency shall be reduced to twenty-one years as to any or all persons subject to such contingency. S 9-1.3 Rules of construction (a) Unless a contrary intention appears, the rules of construction provided in this section govern with respect to any matter affecting the rule against perpetuities. (b) It shall be presumed that the creator intended the estate to be valid. (c) Where an estate would, except for this paragraph, be invalid because of the possibility that the person to whom it is given or limited may be a person not in being at the time of the creation of the estate, and such person is referred to in the instrument creating such estate as the spouse of another without other identification, it shall be presumed that such reference is to a person in being on the effective date of the instrument. (d) Where the duration or vesting of an estate is contingent upon the probate of a will, the appointment of a fiduciary, the location of a distributee, the payment of debts, the sale of assets, the settlement of an estate, the determination of questions relating to an estate or transfer tax or the occurrence of any specified contingency, it shall be presumed that the creator of such estate intended such contingency to occur, if at all, within twenty-one years from the effective date of the instrument creating such estate. (e) (1) Where the validity of a disposition depends upon the ability of a person to have a child at some future time, it shall be presumed, subject to subparagraph (2), that a male can have a child at fourteen years of age or over, but not under that age, and that a female can have a child at twelve years of age or over, but not under that age or over the age of fifty-five years. (2) In the case of a living person, evidence may be given to establish whether he or she is able to have a child at the time in question. (3) Where the validity of a disposition depends upon the ability of a person to have a child at some future time, the possibility that such person may have a child by adoption shall be disregarded. (4) The provisions of subparagraphs (1), (2) and (3) shall not apply for any purpose other than that of determining the validity of a disposition under the rule against perpetuities where such validity depends on the ability of a person to have a child at some future time. A determination of validity or invalidity of a disposition under the rule against perpetuities by the application of subparagraph (1) or (2) or (3) shall not be affected by the later occurrence of facts in contradiction to the facts presumed or determined or the possibility of adoption disregarded under subparagraphs (1) or (2) or (3). S 9-1.4 Acquisition of real property by foreign trust Where real property situated in this state is acquired by a trust validly created under the law of another jurisdiction, whether there is a violation of the rule against perpetuities and whether a direction for the accumulation of rents and profits is valid are determined by the law of this state in effect at the time of the acquisition of such property. S 9-1.5 Trust with transferable certificates A trust with transferable certificates, heretofore or hereafter created, is not invalid as violating the rule against perpetuities; but such trust may continue for such time as may be necessary to accomplish the purposes for which it is created if the instrument creating such trust provides that it may be terminated at any time by action of the trustees or by affirmative vote of the beneficiaries having a specified percentage of interest therein. This section applies to an investment trust, which is an unincorporated trust or association managed by trustees not holding any property for sale to customers in the ordinary course of its trade or business, the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest offered for sale to the public.
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S 9-1.6 Trust for employees A trust created by an employer, as part of a stock bonus, pension, disability or death benefit or profit-sharing plan, for the exclusive benefit of some or all of his employees, to which contributions are made by such employer or employees, or both, for the purpose of distributing to such employees the income or principal, or both, of the fund so held in trust, is not invalid as violating the rule against perpetuities; but such trust may continue for such time as may be necessary to accomplish the purposes for which it is created. S 9-1.7 Trust for self-employed individuals and others No trust created under a retirement plan, which is exempt from federal income taxation under the laws of the United States, is invalid as violating the rule against perpetuities or the rules governing the accumulation of income. Such a trust may continue for such time as may be necessary to accomplish the purposes for which it is created; may permit the accumulation of income until such time as the income is distributed to the beneficiaries under the terms of the trust; and may, according to its terms, be made irrevocable and the interest of its beneficiaries nontransferable by assignment or otherwise. A trust so made irrevocable is not subject to revocation upon the written consent of its beneficiaries as provided in 7-1.9. S 9-1.8 Trust created by national securities exchange to assist customers of members, member firms or member corporations (a) A trust created by a national securities exchange for the purpose of enabling the trustees, in their discretion, to provide direct or indirect assistance to customers of a member, member firm or member corporation of such exchange, threatened with loss of their money or securities because such member, member firm or member corporation, in the opinion of the trustees, is insolvent or may be unable without assistance to meet its obligations to such customers, is not invalid as violating the rule against perpetuities or the rules governing the accumulation of income. Such a trust may continue and may accumulate the income from the property held therein for such time as may be necessary to accomplish the purposes for which it is created. (b) As used in this section, the term "national securities exchange" means any exchange registered as a national securities exchange under the federal securities exchange act of nineteen hundred thirty-four, as the same may be amended from time to time.
PART 2. ACCUMULATIONS S 9-2.1 Rules governing accumulations (a) All directions for the accumulation of income are void unless authorized by statute. (b) A direction for the accumulation of income is valid if such accumulation is to begin and terminate within the time allowed by the rule against perpetuities. An accumulation directed to continue for a period extending beyond the expiration of such time terminates upon such expiration. (c) Where property is disposed of in trust for any religious, charitable, educational or benevolent purpose and no valid future estate, except for a similar purpose, is created by such disposition, a direction for the accumulation by the trustee of income received for such purpose is valid without regard to the time at which the accumulation is to begin or to terminate, but the accumulation is subject to the supervision and control of the supreme court or the surrogate`s court as provided in 8-1.1. (d) The income from a trust created by an employer, as part of a stock bonus, a pension, disability or death benefit or profit-sharing plan, for the exclusive benefit of some or all of his employees, to which contributions are made by such employer or employees or both, for the purpose of distributing to such employees the income or principal, or both, of the trust, may be accumulated until the funds are sufficient, in the opinion of the employer, to accomplish the purposes of such plan. S 9-2.2 Anticipation of directed accumulation (a) When a valid accumulation is directed for the benefit of a person without other sufficient means to support or educate himself, the supreme court or, if such accumulation was directed by will, the surrogate`s court of the county in which such will is admitted to probate, on the application of such person, his guardian, committee, or conservator may direct that a suitable sum from the income accumulated or to be accumulated be applied for the support or education of such person. (b) When the proceeds of a life insurance policy issued or delivered in this state are being retained under an agreement by the insurer to credit interest thereon for the benefit of a person without other sufficient means to support or educate himself, the supreme court, on the application of such person, his guardian, committee, or conservator may direct that a suitable sum from the interest credited or agreed to be credited be applied for the support or education of such person. S 9-2.3 Undistributed income When income is not disposed of and no valid direction is given for its accumulation it passes to the persons presumptively entitled to the next eventual estate.