Legal Definitions - Residue

The term residue, in the context of estate planning and probate, refers to the portion of a deceased person's estate that remains after all specific gifts (such as particular items of property or specific sums of money), debts, taxes, and administrative expenses have been paid. It is essentially the "leftover" or "remainder" of the estate.

This remaining property is then distributed according to the instructions in the deceased's will, typically through a "residuary clause" that names the beneficiaries who will receive this final portion. If there is no will, or if the will does not contain a valid residuary clause, the residue will be distributed according to the laws of intestacy (dying without a valid will) in the relevant jurisdiction.

Here are some examples to illustrate how the term applies:

• Example 1: Standard Will Distribution
  Imagine a will that states: "I give my antique grandfather clock to my grandson, my collection of rare books to my university, and $25,000 to my local animal shelter. All the rest, residue, and remainder of my property, both real and personal, I give to my daughter."

  Explanation: In this scenario, after the grandfather clock, rare books, and $25,000 have been distributed to their respective beneficiaries, and all outstanding debts, taxes, and probate expenses of the estate have been settled, whatever assets are left over constitute the residue. This remaining portion of the estate would then be given to the daughter, as specified in the will's residuary clause.

• Example 2: Unclaimed or Failed Specific Gift
  Consider a will that includes a specific bequest: "I give my vintage car to my dear friend, Sarah Chen." However, tragically, Sarah Chen passed away before the person who made the will, and the will does not name an alternative beneficiary for the car.

  Explanation: Since Sarah Chen cannot receive the specific gift, the vintage car cannot be distributed as originally intended. Unless the will contains specific instructions for this situation, the car would then "fall into" the residue of the estate. It would be treated as part of the general remaining assets and distributed to the beneficiaries named in the will's residuary clause, rather than going to Sarah's own estate.

• Example 3: Estate with Significant Liabilities
  Suppose an individual's estate consists of a house, a savings account, and some investments. The will makes a specific gift of $100,000 to a niece. However, the estate has substantial outstanding medical bills, funeral expenses, and legal fees associated with the probate process.

  Explanation: Before the niece can receive her $100,000, all the estate's debts, taxes, and administrative expenses must be paid from the available assets. Only after these obligations are fully satisfied, and the specific gift to the niece is made, will any remaining assets form the residue. This residue would then be distributed according to the will's residuary clause, or by state law if no such clause exists or is valid.