Residuary Estate Legal Issues

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What is a Residuary Estate?

A residuary estate is that part of a deceased person’s estate which remains once all the specific distributions, gifts, and bequests have been distributed to the named beneficiaries, and after all the person’s debts and claims have been satisfied.  In some cases, there might not be anything left after these post-death actions have taken place, but in some instances there can still be a significant amount of property left over in the residuary estate.

The residuary estate is also known as the “residual estate” or simply, the “residue”.

What Happens to the Residuary Estate?

Depending on the person’s estate, and state laws, there can be several different things that can happen to the residuary estate.  First, the estate holder may actually appoint a specific person who will inherit the residuary estate.  This person is known as the “residuary beneficiary”, “residuary taker”, or “residuary legatee”. 

The specific details of this transfer are contained in a clause in the will known as the “residuary clause” or “residuary bequest”.  In many cases, the residuary taker is a charitable organization.

If there is no residuary estate clause, the residual estate may sometimes pass to the testator’s heirs based on the intestacy laws in that jurisdiction.  Or, in some instances, the residual estate may escheat back to the state.

What are Some Common Residuary Estate Legal Issues?

Disputes over the distribution of the residuary estate may arise, especially if the residual represents a significant net worth.  For example, one person may be claiming rights to the residual estate, while another person may be claiming that it should go to a charity. 

In most cases, disputes are handled through an official court hearing that would determine how the residuary estate should be processed.  This usually requires the courts to re-examine the testator’s will and any other documents that might indicate how they wished their residual estate to be handled.  This is why it’s very important that the residuary beneficiary be clearly named and identified in order to avoid disputes.

Should I Hire a Lawyer if I Have a Question or Dispute Involving Residuary Estate Matters?

Residuary estate matters can be very complex, and the laws governing them can vary from region to region.  If you have any questions or legal disputes involving residuary estates, you should contact an experienced lawyer in your area.  Your attorney can provide you with professional legal advice to help you deal with your estate situation.  In the event of a lawsuit or a legal conflict, your attorney can provide you with representation during court proceedings.

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Last Modified: 09-29-2012 11:19 AM PDT

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