Comment by Karen J. Sneddon
“The sleeper has awakened!” This dramatic statement referred to a science fiction universe brimming with conniving assassins, bewitching concubines, and political intrigues in need of a mighty warrior to restore the balance of good and evil. Surprisingly, this statement may be just as applicable to the law and specifically to the Rule Against Accumulations. While this may seem overly grandiose applied to a Rule many have not even heard of, the Rule Against Accumulations may prove pivotal to the evolving law that permits trusts to endure forever.
Often overshadowed by the Rule Against Perpetuities, the Rule Against Accumulations may derail the continuation of the current trend of perpetual trusts by restricting provisions that provide for the accumulation of trust income. A recent Maine Supreme Court decision on the Rule Against Accumulations held that modifications or reforms to the Rule Against Perpetuities, by statute or by court decision, do not affect the Rule Against Accumulations. Although several jurisdictions have abolished the Rule Against Perpetuities, seemingly paving the way for the creation of perpetual trusts, the legislatures have neglected to modify or abolish the Rule Against Accumulations, which may void all or part of the trust. Perhaps rather than a mighty warrior who has arisen from slumber to combat perpetual trusts by voiding portions of those trusts, the Rule Against Accumulations is a small monkey wrench that may jam the gears of the perpetual trust machine that is gaining speed and strength. This Comment strives to determine the place of the Rule Against Accumulations in the context of perpetual trusts. This is attempted by not only scrutinizing the Rule Against Accumulations itself but also by revisiting the Rule Against Perpetuities and the concerns raised by perpetual trusts. In addition to the origin and backbone of the Rule Against Accumulations, this Comment considers the tricky twists in the Rule, the results of violating the Rule, and the ways that some jurisdictions have dealt with the Rule.
This Comment begins with a discussion of changes to the common law tenets of trusts. Part III introduces the Rule Against Perpetuities. Part IV discusses the use of perpetual trusts. Part V highlights the Rule Against Accumulations as a stumbling block to the use of perpetual trusts as suggested by the Maine Supreme Court decision, White v. Fleet Bank of Maine. Part VI addresses the Rule Against Accumulations. Finally, Part VII surveys the legislative interpretation of the Rule Against Accumulations.
About the Author
Karen J. Sneddon. J.D. candidate 2002, Tulane Law School; B.A. 1999, Louisiana State University.
Citation
76 Tul. L. Rev. 189 (2001)