Residual Estate Distribution Plan

Residual Estate Distribution Plan

A Residual Estate Distribution Plan is a component of estate planning that outlines how the remaining assets of an individual’s estate will be distributed after all debts, taxes, and specific bequests have been paid or allocated. This plan ensures that the remaining assets—often referred to as the "residue" of the estate—are divided according to the individual’s wishes.

The Residual Estate typically includes all remaining assets that have not been specifically bequeathed to named beneficiaries in a will. For instance, if an individual has specified certain items or amounts of money to be distributed to particular heirs but has not designated what happens to the rest of their estate, the Residual Estate Distribution Plan becomes vital in directing the distribution of those leftover assets.

For example, consider an estate where the deceased has willed their house to their child, a car to a sibling, and has a residual clause stating that the remaining assets should be divided equally among all children. In this scenario, the Residual Estate Distribution Plan specifies that once the house and car are distributed, any remaining funds, investments, or personal property will be equally shared among the children.

In Texas, such plans must comply with state laws regarding wills and probate, ensuring that the distribution process is clear and enforceable. This clarity can help prevent disputes among heirs and facilitate a smoother probate process.