Define: Residuary Estate

A residuary estate refers to the portion of a deceased person’s assets and property that remains after all specific gifts, debts, taxes, and administrative expenses of the estate have been settled. In estate planning and wills, individuals often allocate certain assets or property to specific beneficiaries through specific bequests. Once these distributions and obligations are fulfiled, whatever remains is the residuary estate. This residual portion of the estate is typically distributed according to the terms outlined in the deceased person’s will or, if there is no will, according to the laws of intestacy in the relevant jurisdiction. The residuary estate can include a wide range of assets, such as cash, investments, real estate, personal belongings, and any other property not specifically designated to individual beneficiaries or creditors. Proper management and distribution of the residuary estate are crucial steps in the estate administration process to ensure that the deceased person’s wishes are carried out and that any remaining assets are distributed fairly and efficiently among the beneficiaries.

The property that remains in a deceased person’s estate after all specific gifts are made, and all debts, taxes, administrative fees, probate costs, and court costs are paid. The residuary estate also includes any gifts under a will that fail or lapse. For example, Connie’s will leaves her house and all its furnishings to Andrew, her VW bug to her friend Carl, and the remainder of her property (the residuary estate) to her sister Sara. She doesn’t name any alternate beneficiaries. Carl dies before Connie. The VW bug becomes part of the residuary estate and passes to Sara, along with all of Connie’s property other than the house and furnishings. Also called the residual estate or residue.

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This glossary post was last updated: 29th March 2024.