Understanding the residuary estate and residuary clause

Make sure your leftover assets find the rightful heir.


Elissa Suh

Published July 10, 2019


  • Residuary estate consists of assets you didnt specificially bequeath

  • Unclaimed property with no beneficiary also become residue

  • Add a residuary clause to a will to give away this remainder

When you die, your assets are distributed to your beneficiaries by a will. If you don’t specifically name an asset (like a personal belonging or piece of real estate), and assign it to an heir, it becomes part of the residuary estate. This also happens if you have no beneficiaries or you forgot to bequeath an asset to someone in your will or trust. The residuary estate encompasses all of these overlooked or unclaimed assets that once belonged to the deceased.

With a provision to your will, called a residuary clause, you can bequest any remaining property to a specific beneficiary. If you don’t have a residuary clause in place, the probate court will distribute these assets as per state intestacy laws — or as if there was no will in place at all. That means when you die, if you forgot to bequeath your car to your niece, it might end up with your next of kin, like an estranged child, who you didn’t want to inherit your things.

In this article:

What is the residuary estate?

When someone writes a will or creates a trust, the testator or grantor will provide instructions as to how their belongings and property should be distributed upon their death. He or she typically designates specific bequests — like that the youngest child should receive the rental property, or a sister should inherit all the jewelry.

After these assets have been distributed, and any tax and debts have been paid — just a few duties of the executor — some items and valuables may be left over and end up part of the residuary estate. This might happen for a few reasons.

Most typically, it’s because some items and belongings aren’t valuable enough to be named in a will. (For example, you might not bother with bequesting extra batteries). Instead the testator can give away these belongings with a residuary clause. We’ll discuss that in depth next.

In other circumstances, the testator may have forgotten to identify and bequest an asset in the will. He or she may have acquired a property after the will was written, and forgotten to update the will with a codicil.

Second, a beneficiary may have died before, or predeceased, the testator. If the testator did not name a contingent (secondary) beneficiary or include a method of distribution, like per stripes, to accommodate this scenario, then the dead beneficiary’s inheritance also redirects to the residue of the estate.

What is a residuary clause?

Including this clause in your will enables you pass along any belongings in the residuary estate to a specific person. It is both common and useful, since you otherwise have to list every single asset and piece of property you own and make specific bequests to your beneficiaries.

The clause will name the residuary beneficiary who is also sometimes known as a remainder beneficiary. For example, “I give my car to my niece, my rental property to my son, and the residue of my estate to my wife,” or “….I give the remainder of my estate, including any personal and real property, to my wife.”

If you name a group of people as residuary beneficiaries — “I give the residue of my estate to my surviving children” — there may be confusion as to how it’s divided or what happens if one of them dies. You can however indicate what percentage of the residue goes to each beneficiary. Consult an estate-planning attorney for legal advice to write a will that is as precise as possible. This can save your heirs from legal expenses in the future if there’s a dispute or prevent them from contesting the will. If the will has a no-contest clause, then a residuary beneficiary may even lose his bequest or share of the residue

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Residuary beneficiaries of a trust

You can name a residuary beneficiary of your trust. However, they would only receive assets that were already in the trust at the time of your death, but didn’t have a beneficiary attached to them.

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