{Read in 4 Minutes} As a Trusts and Estates attorney, I deal with Wills quite a lot. Whether I am drafting them as part of an overall estate plan or whether someone has just died and I am representing the Executor offering the Will for probate in the Surrogate’s Court, Wills are a big part of my daily professional life. I have seen thousands of them over my 20 years of practice.
In a Will, there are several types of bequests. A bequest is a provision in the Will that leaves an inheritance to one or more stated beneficiaries. For example, I leave my house to my surviving spouse (or I give $10,000 to my best friend Jane Smith), or I leave my 32-year-old incontinent cat to my next-door neighbor, who I never liked.
In general, there are three major types of bequests. Specific bequests (which usually deal with one or more individual items such as tangible personal property or real property), general bequests (a specific cash sum going to somebody), or residuary bequests — I’m writing today to talk a little more about residuary bequests.
In a Will, a person is giving away assets upon their death. The way most people write Wills is to deal with individual items that they want to see go to specific people, such as tangible personal property or intellectual property and real property. Then, they might make some cash bequests (stated cash amounts that go to identified people or not-for-profit organizations), and then, at the end of the day, there is something left over. The something “leftover” is what we call the Residuary Estate. The residue: that which is left over after paying everything else that has been given away above. Some people choose to itemize every single asset in their Will (which I don’t necessarily recommend), and, therefore, the Residuary Clause is very small or even nonexistent. Most people make a couple of bequests and then the residuary clause winds up being the largest majority of the Estate. For example, maybe someone dies with $200,000. They leave their tangible personal property to someone. They give $20,000 to a beloved charity, and then they leave the residue to one or more beneficiaries. The residue is approximately $180,000, about 90% of the Estate. The Will may give all the residue to one person or organization or be divided among several people and/or organizations. If there is a division, the Will may divide everything into equal or unequal shares.
It’s important to remember that the residuary clause and the residue mean just that — whatever is left over after the Estate has been distributed. In addition to paying any bequests, the Executor often needs to pay several expenses of administration; and miscellaneous and estate taxes; and any debts that the deceased may have left behind. Generally speaking, these can be minor concerning the Residuary Estate, or they can eliminate it.
If you are a residuary beneficiary under a Will, it’s important to get an overall sense of the value of the Estate. So, once you learn of this and the Executor has filed the Will in Court, remember that there are various ways you can obtain this information. First, you can ask the Executor – if they feel like telling. If they don’t, remember that anything filed in the Surrogate’s Court is a matter of public record. You can visit and search in the record room, or you can view the records online through Web Surrogate. Like with anything else important, keeping yourself informed is key. For more information on this topic, please contact me.