Residuary Clause

A residuary clause is a provision in a will or trust that specifies how the remainder of an estate’s assets should be distributed after all specific bequests, debts, taxes, and expenses have been paid. This clause is essential for ensuring that any assets not explicitly mentioned in the will are still effectively allocated to beneficiaries.

The residuary clause serves to capture any assets that might be overlooked or acquired after the will was drafted, thereby preventing them from being distributed according to the laws of intestacy (which govern the distribution of assets when someone dies without a valid will). It provides a clear directive on how to handle the residue of the estate, ensuring the testator’s intent is fulfilled.

For example, if a will states that $10,000 should be given to a friend and a specific piece of real estate is bequeathed to a family member, the residuary clause would dictate who receives the remaining assets, such as bank accounts, personal property, or any other unspecified assets. Without this clause, the leftover assets might be distributed according to state laws, which may not align with the deceased’s wishes.

In Texas, it is crucial for individuals drafting wills to include a well-defined residuary clause to ensure clarity and to minimize disputes among beneficiaries. The clause typically names one or more beneficiaries who will inherit the residual estate, making it an essential component of comprehensive estate planning.