In any estate plan—whether it is an old-fashioned will, a living trust, or a revocable trust—there are two ways that money can be passed on to beneficiaries. One of these ways is by giving a specific bequest, and the other is by giving a residuary gift. For the most part, residuary gifts are the remainder of what is left over after all the specific bequests are given out, explains Robert Winkler of the Winkler Law Offices, an estate planning attorney in San Leandro, California.
In most estate planning documents, an attorney will list the specific gifts that the client wants his beneficiaries to receive. Included in these gifts might be important items or objects that have been passed down between generations, or monetary gifts.
Once a person has made all of his specific bequests, then it’s time to determine what to do with the remainder of his estate. For example, once a $50,000 gift has been given to one family member and the proceeds from the sale of a home have been given to another family member, whatever amount of money is left in the deceased person’s bank accounts will go to whomever he had chosen to receive his residuary gifts.
Winkler says that the term “residuary gifts” is often interpreted to mean “everything else.” Despite the fact that these residuary gifts are essentially made up of whatever is left over after all of the specific bequests are given out to the beneficiaries, Winkler says that a person still needs to name certain beneficiaries to receive these residuary gifts.
As far as these gifts are concerned, Winkler says that a client can name one person, or he can name a number of people to receive the remainder of his estate. There is no pre-determined number of recipients who can receive residuary gifts, although many people do decide to leave their residuary gifts to their spouses, children, or grandchildren.
Because there is no specific amount listed when a person elects to leave his residuary gifts to an individual, there is no way for the beneficiary to know how much he or she can expect to receive until the estate is collected in full. For example, Winkler says that if a person decides to leave the remainder of his estate to his three children, it will not be until the estate is collected up—either by the selling of the physical property or the selling of various assets—that anyone will know for sure what the residuary balance of the estate is going to be.
For people who are interesting in putting residuary gifts into their estate plans, Winkler recommends calling his office for a consultation.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.