(a)Subject to subsections (e) and (f), a trust containing any limitation that, but for this subsection, would violate the rule against perpetuities as modified by Section 1404 shall terminate at the expiration of a period of:
(1)21 years after the death of the last to die of all of the beneficiaries of the instrument who were living at the date when the period of the rule against perpetuities commenced to run; or (2) 21 years after that date if no beneficiary of the instrument was then living, unless events occur that cause an earlier termination in accordance with the terms of the instrument and then the principal shall be distributed as provided by the instrument.
(b)Subject to subsections (c), (d) and (e), when a trust terminates because of the application of subsection (a), the trus
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(a) Subject to subsections (e) and (f), a trust containing any limitation that, but for this subsection, would violate the rule against perpetuities as modified by Section 1404 shall terminate at the expiration of a period of: (1) 21 years after the death of the last to die of all of the beneficiaries of the instrument who were living at the date when the period of the rule against perpetuities commenced to run; or (2) 21 years after that date if no beneficiary of the instrument was then living, unless events occur that cause an earlier termination in accordance with the terms of the instrument and then the principal shall be distributed as provided by the instrument. (b) Subject to subsections (c), (d) and (e), when a trust terminates because of the application of subsection (a), the trustee shall distribute the principal to those persons who would be the heirs at law of the maker of the instrument if he or she died at the expiration of the period specified in subsection (a) and in the proportions then specified by statute, unless the trust was created by the exercise of a power of appointment and then the principal shall be distributed to the person who would have received it if the power had not been exercised. (c) Before any distribution of principal is made pursuant to subsection (b), the trustee shall distribute, out of principal, to each living beneficiary who, but for termination of the trust because of the application of subsection (a), would have been entitled to be paid income after the expiration of the period specified in subsection (a), an amount equal to the present value (determined as provided in subsection (d)) of the income that the beneficiary would have been entitled to be paid after the expiration of that period. (d) In determining the present value of income for purposes of any distribution to a beneficiary pursuant to subsection (c): (1) when income payments would have been subject in whole or in part to any discretionary power, it shall be assumed: (A) that the income that would have been paid to an individual income beneficiary would have been the maximum amount of income that could have been paid to him or her in the exercise of the power; (B) if the income would or might have been payable to more than one beneficiary, that (except as hereinafter provided) each beneficiary would have received an equal share of the income, unless the instrument specifies less than an equal share as the maximum amount or proportion of income that would have been paid to any beneficiary in the exercise of the power, in which event the maximum specified shall control; and (C) if the income would or might have been payable to the descendants of the maker of the instrument or of another person, that, unless the instrument provides otherwise, the descendants would have received the income per stirpes; (2)(A) present value shall be computed on an actuarial basis and there shall be assumed a return of 5%, at simple interest, on the value of the principal from which the beneficiary would have been entitled to receive income; and (B) if the interest in income was to be for the life of the beneficiary or for the life of another, the computation shall be made on the expectancy set forth in the most recently published American Experience Tables of Mortality and no other evidence of duration or expectancy shall be considered; (3) if the trustee cannot determine the present value of any income interest in accordance with the provisions of the instrument and the foregoing rules concerning income payments, the present value of the interest shall be deemed to be zero. (e) This Section applies only when a trust would violate the rule against perpetuities as modified by Section 1404 and does not apply to any trust that would have been valid apart from this Article. (f) This Section does not apply when a trust violates the rule against perpetuities because the trust estate may not vest in the trustee within the period of the rule.