Generally a will contains three types of property to be distributed: direct bequests (gifts) to specific individuals, property to be held in trust for someone else ("testamentary trusts"), and the residuary estate.
A "residuary estate" contains all of the assets leftover after direct bequests and testamentary trusts. In other words, it is what remains after you have given everything away to those whom you specify in the will. Furthermore, any specific bequests that lapse before you die (for example, gifts to specific people who die before you do) automatically pass into the residuary estate.
In the probate process, all taxes, administrative fees, and creditors' claims are paid out of the residuary estate before it passes to your named beneficiary or beneficiaries in the will. Therefore, if you have precious family heirlooms or other items that you want other people to have after you die, it is important to specify them as gifts to keep them safe from probate.
This blog is an advertisement for the Law Office of Philip R. Yabut, PLLC, and the information in this post is not to be construed as legal advice, nor does reading it form an attorney-client relationship. Please do not post confidential information in the comments section.
Philip R. Yabut, Esq. || 1100 N. Glebe Road, Suite 1010, Arlington, VA 22201 || (571) 393-1236 || email@example.com