Legal Definitions - Residuary bequest

A residuary bequest refers to the portion of a deceased person's estate that remains after all specific gifts (also known as specific bequests), debts, taxes, and administrative expenses have been fully paid. It is essentially the "leftover" or "remainder" of the estate.

The individual or entity designated in a will to receive this remaining portion is known as the residuary beneficiary.

Here are some examples to illustrate this concept:

• Example 1: Simple Will with Specific Gifts

  Imagine Sarah's will states: "I give $25,000 to my nephew, Michael; $10,000 to my favorite charity; and the rest, residue, and remainder of my estate to my sister, Emily." After Sarah's death, her executor first pays all her outstanding debts, funeral expenses, and taxes. Then, Michael receives his $25,000 and the charity receives its $10,000. Whatever money, property, or assets are left over after these payments and distributions constitute the residuary bequest, which is then given to Emily. Emily is the residuary beneficiary.

• Example 2: Estate with Unexpected Expenses

  Consider David, who leaves his valuable antique watch to his son, his car to his daughter, and "all the rest of my property" to his grandchildren, equally. After David's passing, it's discovered he had significant medical bills and outstanding property taxes that were not anticipated. Once these debts, along with legal fees and other administrative costs, are settled, and the watch and car are distributed to his children, any remaining cash, investments, or other assets form the residuary bequest that goes to his grandchildren. This demonstrates how the residuary bequest accounts for all obligations, even unexpected ones, before the final distribution of the remainder.

• Example 3: Failed Specific Bequest

  Suppose Maria's will specifies: "My rare book collection to my dear friend, Robert, and the remainder of my estate to my university." If Robert unfortunately passes away before Maria, and Maria's will does not name an alternate recipient for the book collection, that specific gift cannot be fulfilled. In such a scenario, the rare book collection "falls into the residue" of the estate. This means the collection, along with all other assets remaining after debts and taxes are paid, becomes part of the residuary bequest that the university receives. This illustrates that the residuary bequest can include items originally intended as specific gifts that could not be distributed as planned.