I recently had a client engage our services to assist with the probate of her mother’s Last Will and Testament. After reviewing the Last Will and Testament several times, what became clear is that the document lacked a residuary estate distribution clause.
You might ask what is a Residuary Estate?
Residuary Estate Definition: A residuary estate, in the law of wills, is any portion of the testator‘s estate that is not specifically devised to someone in the will, or any property that is part of such a specific devise that fails. It is also known as a residual estate or simply residue
As you may know, the residuary estate distribution clause distributes the remainder of one’s estate once all expenses and specific bequests are compensated.
A typical residuary clause says: I leave all the rest and residue of my property, both real and personal, of whatever nature and wherever situated, assets, including all real and personal property, tangible or intangible, to: _______________.
In this case, it is clear that the Decedent’s intent was to distribute a rental property to all three of her children, while leaving the balance of her assets to only one child.
What if I fail to include the residuary estate distribution clause?
The consequence of failing to include the residuary distribution clause is that the decedent’s residuary estate is now subject to distribution by law, otherwise known as intestate succession. This means that rather than the intended distribution, the residuary estate will be distributed equally amongst all children of the decedent.
Estate Planning at its core is focused upon carrying out one’s wishes both during life and at death. The mistake of not including such a basic and fundamental provision is that now the decedent’s wishes will not be carried out. Words are the lasting impression those who pass away leave.
The words in one’s Will, Trust, Deed, or other planning documents define each step of what happens to one’s property upon their death. Similarly, the absence, misspelling, or misstatement of words affect the distribution of property much the same. Please review your estate planning documents and understand what you are signing.
Remember that estate planning is a process, one that evolves over time, and not a product. Ask questions if you are unsure or if you feel something is missing, because at death, the words as they exist are the guide to what will or will not be done with your estate.
– Gary Altman, Esq. and Adam Abramowitz, Esq.