The residuary estate refers to the portion of an individual’s estate that remains after all debts, taxes, expenses, and specific bequests have been paid and distributed. This includes any assets that were not specifically designated to a beneficiary in a will or trust.
In estate planning, the residuary estate acts as a catch-all for assets that do not fall into specific categories. For example, if a person’s will specifies that certain valuable items, such as a car or jewelry, are to be given to particular heirs, the remaining assets, such as bank accounts, real estate, or personal property not explicitly mentioned, would constitute the residuary estate.
The distribution of the residuary estate is typically directed in the will. If no specific instructions are provided, the assets generally pass according to the state’s intestacy laws, which serve to determine how the estate is distributed among surviving relatives.
In Texas, if a person dies without a will, the residuary estate will be divided according to the state’s intestacy statutes, which prioritize spouses, children, and other close relatives. Understanding the residuary estate is crucial for effective estate planning, as it ensures that all assets are accounted for and distributed according to the deceased’s wishes.
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