It’s hard to explain everything you need to know about residuary estate in one sentence. And luckily, we don’t have to. You asked, and we listened. This post answers the ten most frequently asked questions (FAQ) about residuary estate. Let’s have a look together:
What is a residuary estate?
A residuary estate is the remaining portion of your estate after you’ve paid all debts, expenses, and specific bequests. This can include property, assets, and other possessions. Usually these are things you’re not going to give to a particular person in your will.
Who should receive it?
You can distribute your residuary estate to the beneficiaries you’ve named in the will. If the will does not name any beneficiaries, the laws of intestacy dictate what happens next. These laws are of the state where the deceased person lived.
Can anyone contest the residuary estate?
Yes, the residuary estate can be contested in the same way as any other portion of a person’s estate. This can happen if someone believes that the will is invalid. Or if, for instance, they believe that they have a legal right to a portion of the estate.
How is the residuary estate valued?
A professional appraiser typically values the residuary estate. They will assess the value of the remaining property, assets, and possessions in the estate. This value determines how the distribution of the residuary estate among beneficiaries.
Can the residuary estate be reduced by taxes or other expenses?
Yes, the residuary estate may be reduced by taxes, legal fees, and other expenses. Your general estate should cover these expenses before any other distribution can take place. The executor of the estate is responsible for paying these expenses. They’re, thus, ensuring that distribution happens according to the terms of your will.
How is it distributed among beneficiaries?
The residuary estate is typically distributed among the beneficiaries named in the will. The distribution of the residuary estate follows the terms of the will, and the executor of the estate is responsible for ensuring this.
In most cases, the residuary estate is distributed in equal shares among the beneficiaries. However the will may specify a different distribution.
Can you change the distribution of the residuary estate?
Specifically, could you make any changes after you wrote a will?
In most cases, you cannot easily change the distribution of the residuary estate cannot be changed. Once a will is a legal document that outlines the wishes of the deceased person regarding the distribution of their property.
In some rare cases, the executor of the estate may be able to make changes to the distribution of the residuary estate in accordance with the terms of the will.
Can you use the residuary estate to satisfy any outstanding debts?
Simply put yes. The residuary estate may satisfy any outstanding debts or liabilities of the deceased person. The executor of the estate is responsible for paying any debts or liabilities of the deceased person. And if they think deem it necessary, they may use the assets of the residuary estate to do so.
In some cases, the assets of the residuary estate may not be sufficient to cover your debts and liabilities. In these situations, the executor may need to use the residuary estate in order to raise the necessary funds.
Can you transfer the residuary estate to a trust?
Yes, you can transfer the residuary estate to a trust or other legal entity. This is often done for a variety of reasons, including to manage the assets of the estate. It could also protect the assets from creditors, or provide for the needs of the beneficiaries.
In addition to trusts, the residuary estate may become part of other legal entities, such as corporations or partnerships. This can provide benefits such as asset protection and tax savings. Moreover, it offers the ability to customize the distribution of the assets to meet your needs.
What if all of the beneficiaries of your will die before you?
If all of the beneficiaries you named in your will die before you, the residuary estate will be distributed according to the laws of intestacy in the state where you lived.
You can take steps to ensure that your residuary estate is distributed according to their wishes. Even if the primary beneficiaries are unable to inherit, you can name alternate beneficiaries.
We hope we’ve helped you to understand the concept of residuary estate. If you have any further questions feel free to have a look at our original post or reach out.
The only way you can be in control of your own residuary estate is with a Last Will. And we here at Myend have designed our Last Will to take all this into consideration. Sign up today and explore all the possibilities.