Rule Against Accumulations

Associate Professor of Law Robert Sitkoff of the Northwestern University School of Law has recently published a thoughtful article entitled The Lurking Rule Against Accumulations of Income, 100 Nw. U. L. Rev. 501 (2006).

Here is the abstract of Prof. Sitkoff’s article as posted on SSRN:

For 200 years the rule against accumulations of income, which limits the time during which a settlor may direct the trustee to accumulate and retain income in trust, has lurked in the shadow of its older and more distinguished cousin, the Rule Against Perpetuities. With the erosion of the Rule Against Perpetuities, however, the rule against accumulations may have newfound relevance. Perpetual trusts are more likely than ordinary trusts to involve accumulations of income, and such trusts are designed to endure beyond the permissible common law accumulations period. This essay examines the relevance of the rule against accumulations for the rise of the perpetual trust. The essay also assesses the contemporary policy soundness of the accumulations rule.