Certain parts of the estate planning process can be exciting for the testator. Thinking about who should receive your major assets, like your main residence, your vacation home and your boat, can be a pleasant experience, as can discussing your legacy wishes with those intended beneficiaries.
It is common for people to become so focused on their big assets that they don’t think about the remainder of their property. Your residual or residuary estate could be worth thousands of dollars, if not substantially more, and your estate plan should include these remaining assets to avoid conflicts and probate delays.
You need to address whatever property remains after designating beneficiaries for specific highly-valuable or personally important assets.
What constitutes your residuary estate?
Assets that you do not specifically address in your estate planning documents are all part of your residuary estate. These assets could include your household furniture, the majority of your bank accounts or many other valuable belongings, like your collection of power tools in the garage.
All too often, people leave countless assets without any specific guidance in their estate plans. You will need to decide who should receive those remaining assets after the representative of your estate or the trustee managing your assets distributes specific assets to specific beneficiaries according to your prior instructions.
Some people will choose the executor of their estate as the recipient of the residuary estate as a form of compensation for their services.
Your loved ones may fight if you don’t plan ahead
When you take the time to address everything that matters enough to bequeath it by name and also the remainder of your estate carefully, you leave nothing to chance or open to interpretation. Unanswered questions are often sources of conflict among estate beneficiaries. You must address all of the property you leave behind when you die so that there isn’t anything left for your loved ones to fight over after you die.
When you are very clear about your intentions, there is less risk of the people you love assuming you wanted them to inherit everything that was left and fighting their siblings or other relatives over those assets. Addressing even the smallest remaining Assets in your estate plan will help you limit conflicts among your loved ones and strengthen the legacy you leave behind.