If your primary estate plan document is your will, you’ll likely list all of your major assets and whom you want to receive them after you’re gone. You may also detail specific sentimental items, like jewelry or antiques passed down through the generations and who will inherit them.
What happens if you purchase, are given or inherit something yourself, but you don’t get around to amending your will to include it? Nearly everyone has some assets when they die that aren’t included in their will or another document. They’re considered part of the “residuary estate.”
Assets that end up in your residuary estate
The residuary estate includes anything left unclaimed after the inheritances are disbursed according to the will and all taxes, expenses and debts have been paid from the estate. It can include:
- Any asset that a beneficiary declines if there’s no contingent beneficiary listed
- Anything left to a beneficiary who predeceased the testator of the will
- Smaller items not mentioned in any way, such as furniture, computers, sports equipment and other things around the house or elsewhere.
If this “estate residue” isn’t addressed in your will, it will likely have to go through probate and be disbursed based on the same laws that apply when someone dies intestate, or without a will. You can easily prevent your loved ones from having to deal with this added complication by including a residuary clause in your will.
The residuary clause
A residuary clause names a “remainder beneficiary” to receive any items in your residuary estate. Many people simply name their spouse or another close family member whom they trust to sort through it and donate, sell or distribute the items responsibly.
Clauses like this are just one of many things that people often overlook when they draft a will themselves or even with a “do-it-yourself” online will. Having experienced legal guidance can help save your loved ones unnecessary time, money and stress after you’re gone.