Residual property includes all property of a deceased individual not specifically given to a beneficiary through a will. Whether it be money, household items or even pets, the residual property technically has no owner unless specifically laid out in the will. When there are no provisions made for residual property, the courts must decide who receives the property through the laws of intestacy.
A specific bequest lays out the specific sum of money, specific property or a defined class or kind of property to a specific beneficiary. Charitable bequests work in the same manner, only they are made to charitable organizations. When a will or trust fails to provide for the remaining property or money, there is residual property left over. In most cases, the residual property is divided among the heirs of the estate.
Residual bequests, also known as remainder or residue bequests, allow the will to bequest all leftover property to an individual, individuals or charity. Once the estate debts and administrative expenses of the estate are paid and the bequests are fulfilled, the residual bequests are made. When there is more than one beneficiary of residual bequests, the will usually lays out what percentage of residuals each beneficiary will receive.
Common Property and Residuals
In most wills, a spouse will provide that all remaining property be left to the surviving spouse. The states of California, Arizona, Nevada, Louisiana, Texas, New Mexico, Washington and Wisconsin are community property states. In the eyes of the law, all property acquired in these states during the marriage is considered to be owned equally by each spouse. According to the laws of these states, a person can only bequest half of an estate to beneficiaries other than the spouse.
If the beneficiary of a will is no longer alive and there is no alternative beneficiary named, all property of the estate becomes residual property. The interstate laws of the state will govern how the residual property passes to the remaining heirs. When a will leaves residual property to a charitable organization, federal estate taxes are payable out of the residual estate only, not the full estate.