Writing a will probably takes a lot of time and research. Still, there is the possibility that you will not cover all the assets that you want your family to have following your death. This is where a residuary clause may help you complete your estate plans.
To understand why including a residuary clause in your will could be effective, you should first learn why you might end up with a residuary estate.
A look at a residuary estate
There are probably different items that you will not list in your will, perhaps because they possess little value or you gained them after you wrote your will. Some people forget to update a will or they just overlook assets entirely. In addition, you may list beneficiaries that refuse your assets or they die before you do, which leaves the assets unclaimed.
According to Policy Genius, these assets make up your residuary estate. Because your will does not account for your residuary assets, a probate court will likely determine who gets what, which can turn into a complicated legal affair for your family.
How a residuary clause works
To address the problem of a residuary estate, testators can include a residuary clause in a will. This clause states that any residuary assets will go to beneficiaries that you designate. Using a residuary clause is simple since you do not have to list or describe your residuary assets. Your residuary clause can also account for assets you accumulate in future years.
Keep in mind that a residuary clause may require additional stipulations. If you leave a residuary estate to multiple heirs, you might consider dividing the estate by percentage to help guide the division of your residuary assets. This is a subject you could discuss with your family before settling on a solution.