When drafting a will, it’s not uncommon to focus on significant assets—real estate, substantial bank accounts, and family heirlooms. However, it’s equally important to consider what happens to the property you might forget to include explicitly. This is where the concept of a residuary clause plays a crucial role in estate planning, ensuring that any overlooked assets are distributed according to your wishes.
What Is a Residuary Clause?
Residuary clauses in wills serve as a crucial catch-all provision, ensuring that any assets not specifically mentioned elsewhere in the will are still distributed according to the testator’s wishes. These clauses address the residue of the estate, which includes all property, assets, and possessions that haven’t been explicitly bequeathed to particular beneficiaries through other provisions in the will. It’s a flexible provision that adapts to changes in the estate composition without needing constant updates to the will.
The main function of the residuary clause is to prevent any of your property from passing through intestacy laws. Intestacy laws are state-specific regulations that determine how an estate is divided if there’s no will or if the will doesn’t dispose of all assets. By including residuary clauses, testators ensure that their estates are distributed entirely under their wills’ terms, not by default state laws.
The language of a residuary clause typically reads along the lines of, “I give, devise, and bequeath all the rest, residue, and remainder of my estate, of whatever kind and wherever located, to…” followed by the name of the beneficiary or beneficiaries. This broad phrasing is designed to encompass all assets not otherwise accounted for, making it a critical component of a comprehensive will.
Protecting Forgotten Assets
Assets can be overlooked for various reasons—new acquisitions dating after the will was last updated, smaller items not deemed significant enough to list individually, or simply human error. A well-drafted residuary clause ensures these items are included in your estate plan without needing constant updates for every minor change to your assets.
This clause also serves an essential function in covering assets that might be difficult to categorize or foresee at the time of writing the will. Digital assets are a prime example; as our digital footprints expand, many people acquire online accounts or digital currencies that they might not consider when planning their estate. The residuary clause ensures such modern assets are not left in limbo.
Choosing Residuary Beneficiaries
Selecting the beneficiary or beneficiaries for your residual estate requires careful consideration. Often, people choose their spouse, children, or other close family members for this role. However, it’s also possible to name a trust, charitable organization, or friend as beneficiaries. The key is to consider who would best align with your overall estate planning goals and values.
Legal Concerns for Residuary Clauses
It’s important to understand that the residuary clause, while powerful, is subject to the same legal challenges as any other part of your will. Disputes can arise, especially if the language of the clause is vague or if there are significant changes in your estate after the will is drafted.
For that reason, precision in the language of the residuary clause is crucial. Vague or ambiguous wording can lead to legal disputes among potential heirs. Therefore, it’s advised to work with an estate planning attorney to ensure the clause is clear and encompasses the testator’s intentions accurately. In addition, regularly updating your will with the help of your attorney can help mitigate other challenge risks.
Protect Your Assets and Your Legacy With The Dayton Law Firm P.C.
The residuary clause plays a pivotal role in the planning process, acting as a catch-all to ensure no asset is left behind or distributed against your wishes. By including such a clause in your will, you provide a comprehensive plan that covers all your assets, including those you might forget or acquire after the will is made. Regular consultations with an estate planning professional can ensure that your will remains accurate, up-to-date, and reflective of your desires, providing peace of mind that your estate will be handled according to your wishes. The skilled attorneys at The Dayton Law Firm, P.C., can help you ensure your assets are protected, both those you already own and those you may acquire in the future. Learn more about how we can help you implement residuary clauses in your will by scheduling your consultation today.