Residuary Estate

The residuary estate is the body of assets that makes up the residue — everything not used to pay debts or given away as a specific gift or pecuniary legacy. It is usually the largest part of an estate and is distributed to the residuary beneficiaries named in the Will. Defining it clearly is the safeguard against assets being left undisposed of.

The residuary estate is typically split into shares or percentages so that growth, shrinkage or unexpected assets are shared proportionally. Example: Noah leaves his car and $5,000 as specific gifts, and divides his residuary estate equally between his three children. If a residuary beneficiary predeceases the testator without a substitute beneficiary, that share may pass on intestacy.