What Is a Residuary Gift?

When you write a will, you probably have a few specific things in mind. Your home. A savings account. A piece of jewelry with sentimental value. You know who you want those to go to, and you say so.

But what about everything else?

The furniture, the car, the remaining bank balance after expenses, the things you didn't think to name specifically. All of it adds up. And without a plan for what happens to that remainder, it may not end up where you intended.

That's where a residuary gift comes in.

What Is a Residuary Gift?

A residuary gift is the portion of your estate that's left over after all your specific gifts have been distributed, debts have been paid, and any taxes or expenses have been settled.

Think of it as the catch-all clause in your will. It sweeps up everything that wasn't specifically named and directs it to a person or organization of your choosing.

The person or organization who receives this remainder is called the residuary beneficiary.

Why It Matters More Than It Sounds

It's easy to assume the residuary is a small detail. In practice, it often represents a significant portion of an estate.

Here's why: life changes between when you write your will and when it takes effect. You may acquire new assets you never updated your will to include. Specific gifts may lapse if a named beneficiary passes away before you. Accounts you intended to leave to someone might change in value.

Without a residuary clause, those assets may have no clear destination. Depending on your state's laws, they could be distributed in ways you never intended, or they could pass through a court process that takes time and adds cost for your family.

Naming a residuary beneficiary is a simple way to close that gap.

How a Residuary Gift Works

When your executor settles your estate, they follow a specific order. First, they pay any outstanding debts, taxes, and administrative expenses. Then they distribute specific gifts named in your will. Whatever remains after all of that is your residuary estate.

Your will then directs that remainder to your residuary beneficiary.

You can name one residuary beneficiary or several. If you name more than one, you can specify how the remainder should be divided, such as equally between two people, or by percentage. You can also name a contingent residuary beneficiary as a backup in case your primary choice passes away before you.

Who Can Be a Residuary Beneficiary?

Anyone who can be a beneficiary in a will can be a residuary beneficiary. That includes:

• A spouse, child, sibling, or other family member
• A close friend
• A charity or nonprofit organization
• A trust set up for a minor or someone with special needs

Naming a charity as your residuary beneficiary is a common way to leave a lasting gift without needing to specify a dollar amount upfront. Whatever remains after your loved ones receive their specific gifts goes to the cause you care about.

What Happens If You Don't Name One?

If your will doesn't include a residuary clause, or if your residuary beneficiary passes away before you and there's no contingent named, those remaining assets become what's called "intestate property." They pass according to your state's default inheritance laws, not your wishes.

That often means the assets go to your closest living relatives in a specific legal order, regardless of your actual intentions. Adding a residuary clause, and a backup, is a small step that keeps you in control.

A Practical Way to Think About It

The residuary gift is your will's safety net. It ensures that no matter what you acquire, what changes in value, or what circumstances shift between now and later, there's always a clear destination for what you leave behind.

It's not a complicated concept. It's just a complete one.

Ready to Put Your Plan in Writing?

Naming a residuary beneficiary is one of the steps you'll work through when creating your will with HeirLight. HeirLight helps you work through all of it: your will, healthcare directive, and power of attorney, in one guided experience built for people who want clarity without the overwhelm.

The questions are in plain English. The pace is yours. And you can start for $0.

Once you're done, you'll print and sign your documents according to your state's rules, and the people you care about will have something clear to follow.

If this has been sitting on your to-do list for a while, this is a simple way to finally move it forward.

Important: HeirLight is not a law firm and does not provide legal, tax, or financial advice. Our tools are educational and self-help in nature. For complex situations or legal advice about your specific circumstances, you should consult a licensed attorney.

Sources

The information in this article is based on general estate planning principles and publicly available legal resources. For guidance specific to your state or situation, we recommend speaking with a licensed estate planning attorney.

• Cornell Law School, Legal Information Institute - Residuary Estate - law.cornell.edu/wex/residuary_estate
• Cornell Law School, Legal Information Institute - Intestate - law.cornell.edu/wex/intestate
• American Bar Association - Guide to Wills and Estates - americanbar.org
• AARP - Estate Planning Basics - aarp.org