If a relative wants you to someday serve as an estate executor, you should have an informed idea of what the estate of your loved one will consist of. While a last will and testament can specifically describe some of the possessions of the testator, a will does not always address every possible asset.
It is possible you could end up overseeing a residuary estate. The concept is actually quite simple.
The definition of a residuary estate
A residuary estate refers to any assets not specifically gifted to beneficiaries named in the will. To take one possible scenario, the will you execute may only state that the daughter of the decedent receives a car while the son will get the home where the decedent lived. Any other items owned by the testator would fall into the residuary estate.
Residuary assets can cover almost anything, including household items such as furniture, or real estate or financial accounts. A residuary estate can also encompass assets originally left to a beneficiary who died first. These can consist of items listed in a will as well as assets that have assigned beneficiaries, such as insurance policies and pay-on-death accounts.
How you may oversee residuary assets
Ideally, the will you execute shall name a single residuary beneficiary to inherit whatever assets remain after the other beneficiaries have received their inheritance. As executor, you must transfer the residuary property to this individual.
Without a specific residuary beneficiary, Texas estate laws dictate who receives residuary assets. You still facilitate this transfer as executor, but the rules differ. Distant relatives may end up inheriting possessions the deceased would have preferred to leave to someone else.
According to the Texas Judicial Branch, 89% of new probate and guardianship cases involved the transfer of property because of the death of an individual. So if you are working with a relative to compose a will, now is a good time to account for residuary property so you can ease your future burden and avoid possible legal contests.