When developing your estate plan, part of your focus is on the distribution of your assets after you pass away. You may have some specific assets that you want to go to specific individuals, but it is nearly impossible to address every account or asset you own. There may be some things you unintentionally overlook. There may be some assets you would think would be fine to distribute to one main beneficiary or to be divided among certain individuals. By including a residuary clause, you can direct distribution of assets that may have been overlooked or that should be distributed to that one main named beneficiary or group of beneficiaries.

Ensuring That Everything You Own Goes to the Right People
During the estate planning process, you may decide that you want to leave certain items to specific individuals. But what happens in the following situations?

• You did not include everything you own in your will or trust.
• You do not address personal property you may think has little value, like clothing or furniture and hand tools in the garage.
• You acquired new accounts or property after your estate plan was completed but you did not update it accordingly.
• You have retirement accounts, bank accounts, or insurance policies but do not have completed beneficiary designations.
• You have not named backup beneficiaries if something happens to your first choice — they predecease you, are unable to receive their inheritance for some reason, or decide they do not want it.

A residuary clause outlines what should happen to any property that has not been specifically addressed in your documents or assigned to a beneficiary.

Without a residuary clause, your loved ones may be subjected to complications in the probate or trust administration process. Any money or property that has not been specifically left to someone will be distributed according to state laws, potentially going to individuals you did not intend.

The Challenge of Remembering Everything in Your Will or Trust
It can be difficult to meticulously catalog and address every single possession in your will or trust. That is why the residuary clause exists. Provisions can be made in your will or trust for each beneficiary and what they should receive. Then, to ensure that everything you own or that is part of your will or trust is accounted for, a clause similar to one of the following can be added to your will or trust:

“I leave the remainder of my estate to _____.”

“The deceased settlor’s remaining property will be administered as follows:”

When crafting the residuary clause, you can name a person or charity that you would like to have inherit what is left over after you provide instructions for specific items or property. You could also decide to have the remaining amount divided among multiple people, charities, or a combination of both. For more than one person or charity, it can be helpful to specify the percentage that each person or charity will get to eliminate any problems or confusion.

The residuary clause guarantees that everything you own ultimately finds its way to the individuals or charities you want.

Let Us Help
The last thing anyone wants is to leave their grieving family to deal with confusion and disappointment after they pass. When designed properly, wills and trusts can offer clear instructions for a personal representative or trustee to follow, providing a smooth administration process. Let us help you create a comprehensive legal plan that leaves no room for ambiguity and avoids complications during probate and trust administration. Schedule a meeting with us and let us help you thoughtfully consider your options and create a plan that ensures that your legacy will be passed on according to your wishes.