Dispositions of the income of property to accrue and to be received at any time subsequent to the execution of the instrument creating such disposition are governed by the rules relating to future interests.
Modifications of OwnershipAccumulations
Section § 722
This law is about deciding what happens to the income from a property that will be earned in the future. It says that how this income is handled is guided by the rules for future interests, which are rules about property rights and benefits that take effect in the future.
income of property future interests property rights
Section § 723
This law states that any instructions to save up income generated from property are not valid unless specifically permitted by this Title of the law.
All directions for the accumulation of the income of property, except such as are allowed by this Title, are void.
property income accumulation directions income restrictions
Section § 724
This section addresses how income from property can be accumulated through a will, trust, or written transfer for the benefit of specific people or purposes. However, this accumulation can't exceed the time allowed for future interest to vest. There's an exception for income accumulated in trust from a profit-sharing or retirement plan for employees. This income can continue to accumulate until it's enough to meet the plan's goals, as determined by the trustees.
(a)CA Civil Law Code § 724(a) An accumulation of the income of property may be directed by any will, trust or transfer in writing sufficient to pass the property or create the trust out of which the fund is to arise, for the benefit of one or more persons, objects or purposes, but may not extend beyond the time permitted for the vesting of future interests.
(b)CA Civil Law Code § 724(b) Notwithstanding subdivision (a), the income arising from real or personal property held in a trust forming part of a profit-sharing plan of an employer for the exclusive benefit of its employees or their beneficiaries or forming
part of a retirement plan formed primarily for the purpose of providing benefits for employees on or after retirement may be permitted to accumulate until the fund is sufficient, in the opinion of the trustee or trustees, to accomplish the purposes of the trust.
income accumulation future interests vesting period
Section § 725
This law says that if a legal document tries to set aside income from property for a longer time than the law allows, that part of the document is void beyond the allowed time. The rest of the document is still valid and not impacted by the invalid part.
If the direction for an accumulation of the income of property is for a longer term than is limited in the last section, the direction only, whether separable or not from the other provisions of the instrument, is void as respects the time beyond the limit prescribed in said last section, and no other part of such instrument is affected by the void portion of such direction.
accumulation of income property income legal document
Section § 726
If a person is supposed to benefit from saved-up funds but doesn't have enough money to live on or pay for education, they can ask a court to give them some of that money right away to help with their needs.
When one or more persons for whose benefit an accumulation of income has been directed is or are destitute of other sufficient means of support or education, the proper court, upon application, may direct a suitable sum to be applied thereto out of the fund directed to be accumulated for the benefit of such person or persons.
accumulation of income sufficient means of support court application
