Residuary estate

The residuary estate — the residue — is everything left after debts, funeral expenses, taxes, administration costs and all specific and pecuniary gifts have been paid. It is disposed of by the residuary clause.

Why it is the most important clause in the will#

Because it catches everything. Assets acquired after the will was made, gifts that fail because the beneficiary died first, property the testator forgot about, and anything the will did not otherwise mention all fall into residue.

A will without a valid residuary gift results in a partial intestacy: the residue passes under the intestacy rules rather than as the testator intended. It is one of the more serious drafting failures and it is entirely avoidable.

What a well-drafted residuary clause deals with#

• Who takes it, and in what shares
• A survivorship period — commonly 28 days, so an estate does not pass through two probates in quick succession after a joint accident
• Substitution — who takes a share if a named beneficiary dies first
• Contingency — an age condition, typically 18 or 25
• Per stirpes or per capita — whether a deceased child's share passes to their own children, or is divided among the surviving children
• A long-stop — where everything goes if every named beneficiary has died

The long-stop is the one most often omitted, and the one that matters when a whole family is lost together.

A common error#

Giving a specific asset away and then also including it in residue — or giving away "my house" when the house has been sold and replaced, so the gift adeems and fails. Validation in drafting software exists substantially to catch this class of mistake.

Related#

Executor · Intestacy rules · Will writing software