California Civil Code 885.040 – (a) If a power of termination becomes obsolete, the power …
(a) If a power of termination becomes obsolete, the power expires.
(b) As used in this section, a power of termination is obsolete if any of the following circumstances applies:
Terms Used In California Civil Code 885.040
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Fee simple: Absolute title to property with no limitations or restrictions regarding the person who may inherit it.
- Grantor: The person who establishes a trust and places property into it.
- Power of termination: includes the power created in a transferee to terminate a fee simple estate in real property to enforce a restriction on the use of the real property in the form of a limitation or condition subsequent to which the fee simple estate is subject, whether the power is characterized in the instrument that creates or evidences it as an executory interest, executory limitation, or otherwise, and includes the interest known at common law as an executory interest preceded by a fee simple determinable. See California Civil Code 885.010
(1) The restriction to which the fee simple estate is subject is of no actual and substantial benefit to the holder of the power.
(2) Enforcement of the power would not effectuate the purpose of the restriction to which the fee simple estate is subject.
(3) It would be otherwise inequitable to enforce the power because of changed conditions or circumstances.
(c) No power of termination shall expire under this section during the life of the grantor if it arises from a grant by a natural person without consideration to a public entity or to a society, corporation, institution, or association exempt by the laws of this state from taxation.
(Added by Stats. 1982, Ch. 1268, Sec. 1.)