A residuary estate is part of an individual's estate left after all the claims and debts have been settled and all the proper assets have been distributed to beneficiaries, says LegalMatch. The trustee is often given instruction in a will through a residuary clause about actions to take with the remainder of the estate.Continue Reading
If a will does not have such a residuary clause empowering the trustee on what actions to take with the remaining assets, then such assets are likely to be distributed according to the specific laws of the state where the will was executed, according to LegalMatch. The estate holder may appoint a person who inherits the residuary estate. Such a person is known as the residuary beneficiary.
Conflicts regarding the fate of the residuary estate if no clear clause has set the terms of action are dealt with through court hearings, explains LegalMatch. Such conflicts may arise when the residuary estate represents a significant value in assets. These hearings go over the will again and may involve other legal documents to help court officials determine how the estate holder may have wanted the residuary estate handled. Because residuary estate matters can be very complex, any individual with a stake in the matter should consult an expert attorney.Learn more about Financial Planning