The main priority for many people planning their estates is to ensure the right people inherit their most valuable property and prevent their loved ones from fighting over their assets. Most people prioritize their high-value resources, including financial accounts, vehicles and real property, when drafting wills or other estate planning documents.
Unfortunately, they may fail to address their residuary estates, which can result in major issues after they die. The strongest estate plans address the residuary estate, not just the most valuable property a testator owns.
What constitutes a residuary estate?
The residuary estate of a testator is any property they own directly that they do not specifically address in their estate plan. Frequently, the residuary estate consists of personal items, ranging from home furnishings to clothing.
There are numerous ways to address the residuary estate in an estate plan. People can allocate the residuary estate to a specific family member or leave instructions for its donation to a charitable cause. They can ask a personal representative to hold an estate sale and distribute any sale proceeds among their beneficiaries in a specific fashion.
They can even leave instructions to divide their property among their beneficiaries. Just a few lines in an existing will can reduce opportunities for disagreements among beneficiaries or stress for a personal representative.
Making an effort to address property not already included in an estate plan can help people limit opportunities for disputes after their passing. Even if a residuary estate does not have much financial value, it can be a source of conflict if left unaddressed.