It’s wise to review and update your will and other estate plan documents periodically – particularly when there are changes to your life or family that could affect it. However, it’s not practical to update it every time you buy or receive a new computer, piece of furniture or jewelry.
You don’t have to. You just need to make sure that your will has a residuary clause.
What is a residuary clause?
A residuary clause addresses what’s considered your “residuary estate.” This is where assets not included in your will or elsewhere in your estate plan go. In your residuary clause, you can name a “remainder beneficiary” for these items.
People often name their spouse or another family member who can then keep, sell, distribute or donate the assets. You can also designate that items in your residuary estate will be returned to the estate to be sold and the proceeds distributed as you designate (for example, a specific percentage to each child or to various charitable organizations).
Other assets that can become part of your residuary estate
Besides assets that you didn’t include in your will, the following can also become part of your residuary estate:
- An asset declined by a designated beneficiary (if there’s no contingent beneficiary who accepts it)
- An asset left to a beneficiary who has passed away (again, if there’s no contingent beneficiary)
A simple residuary clause in a will (or living trust) can prevent your family from having to deal with these items in probate. They would have to be disbursed to family members according to state law just the same as if you’d died without a will (intestate).
With experienced legal guidance, you can prevent unnecessary and potentially costly complications for your family after you’re gone. For help with your estate planning, call us at 814-806-2518.
