Residuary Estate Questions
What is a residuary estate?A residuary estate is one that is left after all the debts, administration expenses and legacies of the estate are satisfied. It contains all property that may not be disposed by the will legally.
Are life insurance policies a part of the residuary estate?Life insurance policies that have the names of beneficiaries on them may not be a part of the residuary estate. These will directly pass on to the beneficiaries on the death of the policy holder. They may not be used to repay any debts of the owner.
Would joint accounts be a part of a residuary estate?Joint accounts may not be considered to be a part of an individual’s residuary estate. They would be passed onto the co-owner directly on the death of one of the owners.
Would any property that is not named in an individual’s will be a part of the residuary estate?Any kind of property that is not mentioned in the will may be a part of the residuary estate. Most of the times, families of the deceased individual may decide how to distribute the property that is not there in the will. However, technically, this property may be passed onto the beneficiary on the death of the owner.
What language can an individual use to split his/her residuary estate equally among all the beneficiaries?An individual may use the following language if they want to split their residuary estate equally among the beneficiaries: “I hereby direct my residuary estate to descend and be divided equally between my surviving children, X and Y. Should Y predecease me, I direct that their share shall descend and be equally divided between their children, A, B and C as well as D, the child of Z, who passed on Jan 1, 2000”
Is the estate split 50/50 among its beneficiaries always?An estate need not be split 50/50 among its beneficiaries. The division of the property in an estate depends on the terms that are mentioned in the estate. In some cases, one beneficiary may be left with a larger amount than the other.
How can the property be distributed among the residuary beneficiaries if there is no agreement between them on the distribution?If there are multiple residuary beneficiaries for an estate and they cannot come up with an agreement over the distribution of the property, then most of the times, the executor may get the property appraised and sell everything. The proceeds of the sale may then be equally distributed among all the beneficiaries.
What is a residuary clause?A residuary clause is a clause in a will which states that any property that remains in the will after all the debts and costs are cleared may be disposed off.
Any property that remains in the estate after all the debts and bills are cleared needs to be distributed correctly among all the beneficiaries. Sometimes the provisions of the estate may be difficult to understand and can confuse the executor. Asking an Expert and getting any questions that may arise answered can help in better administration of the estate.