Legal Definitions - Residuary beneficiary

A residuary beneficiary is an individual or entity designated to receive the remaining portion of an estate or trust property after all specific gifts, debts, taxes, and administrative expenses have been paid. This remaining portion is often referred to as the residuary estate or residuary bequest.

Essentially, the residuary beneficiary receives everything that is left over once all other specific instructions in a will or trust have been fulfilled. This role acts as a "catch-all" to ensure that no property is left undistributed.

• Example 1: A Comprehensive Will

  Imagine a will that states: "My antique grandfather clock goes to my nephew, David. My collection of rare books goes to my niece, Sarah. The sum of $10,000 goes to the local animal shelter. All the rest, residue, and remainder of my property, both real and personal, I give, devise, and bequeath to my sister, Eleanor."

  How it illustrates the term: In this scenario, Eleanor is the residuary beneficiary. She will receive all assets that are not specifically given to David, Sarah, or the animal shelter. This includes bank accounts, investments, furniture, or any other property not explicitly mentioned in the specific bequests.

• Example 2: Unforeseen or Unmentioned Assets

  A person creates a trust specifying: "My beach house shall be held for the benefit of my son, Michael, for his lifetime. My shares in XYZ Corp. shall be distributed to my daughter, Lisa, upon my death. Any remaining assets in this trust shall be distributed to my alma mater, State University." Years later, the person inherits a significant sum of money and adds it to the trust without amending the specific distribution clauses.

  How it illustrates the term: State University is the residuary beneficiary. Even though the inherited money wasn't specifically mentioned in the trust's initial distribution plan, it falls into the "remaining assets" category. After Michael and Lisa receive their specific entitlements, this additional money will be distributed to the university.

• Example 3: A Failed Specific Gift

  A will specifies a gift of a valuable painting to a friend, Mr. Chen. However, Mr. Chen unfortunately passes away before the person who made the will. The will does not name an alternate recipient for the painting if Mr. Chen cannot receive it.

  How it illustrates the term: In this situation, the specific gift to Mr. Chen "lapses" or fails because he is no longer alive to receive it. Unless the will specifies otherwise, the painting would then become part of the residuary estate and be distributed to the designated residuary beneficiary, rather than going to Mr. Chen's own heirs or being distributed as if there were no will for that item.