Residuary estate

What it means

A will usually makes some specific gifts and then disposes of everything else — the residue — to one person or divided among several.

The residuary beneficiaries bear the cost of everything paid before them: debts, taxes, fees, and any specific gift that turns out to be larger than expected.

A gift that fails, because the beneficiary died or the item no longer exists, normally falls into the residue.

Why it matters

It is where nearly all of the value in most estates actually ends up, and it is the clause families read past.

It also determines who is really affected by the cost of administration. A slow, expensive estate reduces the residue, not the specific gifts.

When you are likely to meet it

• When reading a will.
• When a specific gift cannot be made.
• When calculating what each beneficiary will receive.

How this varies by state

Where a failed gift goes, and how a lapsed residuary share is shared out, are set by state statute.

Related terms

• AbatementThe order in which gifts in a will are reduced when the estate cannot pay for everything.
• AdemptionWhat happens when a will leaves a specific item that no longer exists at death: the gift usually simply fails.
• AdvancementA gift made during life that counts against what that person inherits at death.
• Anti-lapse statuteThe rule that sends a gift to the children of a beneficiary who died before the person who made the will.
• BeneficiarySomeone who receives something because a document says so.
• DeviseA gift made by will — historically of land, and in modern statutes of anything.
• DistributeeA person entitled to receive property from an estate — the word statutes use where a family would say heir.
• EstateEverything the person owned at the moment they died, treated as one thing that has to be settled.
• Estate accountingA statement of everything that came into the estate and everything that went out, presented before the estate can be closed.
• Executor compensationAn executor may generally be paid for the work. The payment is taxable income; an inheritance usually is not.
• Per capitaA way of dividing an inheritance among the beneficiaries who are actually alive, so a deceased beneficiary's children receive nothing.
• Per stirpesA way of dividing an inheritance so that if a beneficiary has died, their share passes down to their own children rather than to the other beneficiaries.
• Specific bequestA gift in a will of a particular thing — a named account, a ring, a car — rather than a share of what is left.
• WillA written document saying who should receive what, and who should be in charge of seeing that it happens.

Sahvelo guidance that uses this

• The will