Estate planning is a deeply personal process that often requires someone to go into great detail about their preferences for their legacy. Testators creating or updating wills, trusts and similar documents often need to fixate on specific types of property, such as real estate, financial accounts, businesses and other high-value assets.
However, there are often numerous additional assets that don’t seem significant enough to address individually. Any assets not specifically mentioned in a will or other testamentary documents become part of someone’s residuary estate.
Although those assets may seem negligible to someone thinking about their long-term impact on their loved ones, someone’s residuary estate could actually be the source of expensive and relationship damaging-estate litigation. Why would the assets not discussed in someone’s estate plan lead to conflict?
1. Those assets may be very valuable
Whether someone invested in a classic vehicle that they maintained in pristine condition or accumulated an impressive collection of vintage mirrors, the personal belongings someone doesn’t see fit to mention in their will or trust documents could be worth thousands of dollars.
Those assets may have a value beyond what the testator realizes, or they may think that the value would require too much effort for beneficiaries to desire that property. Anytime family members recognize that there is valuable property not included in an estate plan, they may end up fighting with one another over who gets to retain those assets.
2. Those assets may have sentimental value
Items like furniture, housewares and even clothing can be useful for people and a poignant, regular reminder of someone they love but have lost. Some people will end up fighting with loved ones because they want to keep certain assets from the estate that others would rather sell off for a fraction of their fair market value at an estate sale.
When there is a disagreement among beneficiaries or between the beneficiaries and the executor of the estate, those unaddressed assets could be the reason the family ends up embroiled in a probate conflict. Testators who want to ensure a smooth transfer of property ownership after they die may need to address their residuary estate by leaving clear instructions about the assets they haven’t mentioned elsewhere in their documents.
Integrating thoughtful terms into an estate plan is crucial for someone attempting to structure their legacy. Seeking legal guidance concerning one’s residuary estate is, therefore, often very helpful.