What Happens to Income During a Suspension
Certain property arrangements create a gap period where no one can sell or transfer the property. This can happen when a future estate is validly created but the conditions for the next owner to take possession have not yet been met. During that window, the property may still generate rental income or other profits.
When in consequence of a valid limitation of an estate in expectancy there is a suspension of the power of alienation, or ownership, during the continuance of which the rents and profits are undisposed of and no valid direction for their accumulation is given, the rents and profits belong to the person presumptively entitled to the next eventual estate.
A.R.S. § 33-240Arizona law fills the gap by assigning those undirected rents and profits to whoever is next in line to receive the property. This prevents income from sitting in limbo with no clear owner.
Why This Matters for Estate Planning
This statute reinforces a practical principle: property should not generate income that belongs to no one. When creating estate plans involving future interests or life estates, it is important to address what happens with rents, dividends, and other income during transitional periods. A well-drafted trust or estate plan can specify exactly who receives income at every stage, which avoids relying on default rules like this one.
For families with rental properties, investment real estate, or agricultural land that may pass through multiple generations, consulting with experienced estate planning counsel can help ensure that income rights are clearly defined at every step.
