Court Bonds

Residuary Estate?



After the expenses of an estate are paid, and the assets specified in wills and trusts distributed, what remains unaccounted for is referred to as the residuary estate.  Books, furniture, jewelry, and other household and personal items are the kinds of possessions that accumulate over a lifetime and are often overlooked in estate plans. Read on for advice about handling the residuary estate.


Keep, Discard, Donate, Sell…

As emotionally difficult as sorting through the personal belongings of a deceased loved one can be, that’s what generally needs to happen, with an eye toward what is to be kept (and by whom), donated, sold or discarded (and ideally recycled). DS Law encourages families to take care in making these decisions, so as not to have regrets and conflicts down the road, especially since some items in a residuary estate might turn out to be of value:


A residuary estate can contain newly acquired accounts and property that were not accounted for in the latest draft of an estate plan. It can also contain overlooked items that, at least on the surface, seem to have nothing more than sentimental value. An old family Bible might be left to a close family member. The other books on the shelf, though, may be left in no-man’s-land. Most wills and trusts contain language specifying the disposition of the residuary estate. The language might state, for example, that any residuary estate goes to an individual family member, into a trust, or to charity.


If the residuary language is general, such as “all my personal belongings are to be divided equally among my children,” it is likely that the children will have to decide what to do with…personal belongings that they do not want….Going through a loved one’s belongings once they are gone can be an emotionally difficult process.


Anecdotes about the value of books–and items found in them–underscore the importance of not being too cavalier in the sorting process of a residuary estate. Experts note that in addition to evaluating the “rarity, scarcity and condition” of books, it’s also important to check what’s inside them: findings have included winning lottery tickets, money, and collector’s items (a lock of George Washington’s hair!). While most artifacts that end up in books are more likely to be of emotional than monetary value (think concert tickets, a news clipping or a photo), no one wants to find out they gave away a rare book that had a valuable signed autograph from a noteworthy author.


After an initial sort through of the residuary estate, some families find that engaging professionals for an estate sale is the way to go and attorneys point out: “These companies are knowledgeable about pricing items for sale and can help ease the emotional burden of selling a deceased loved one’s property. It is important to ask for the company’s price up front and to get an estimate of the value of your items to avoid paying for the estate sale out of pocket if not enough items sell or not enough money is raised.” Typically, when an estate plan is made, a family member or friend is appointed as the fiduciary and charged with settling the associated affairs. This fiduciary is the person ultimately responsible for the appropriate management of an estate sale and other tasks related to the sorting out of the residuary estate.  Fiduciaries, such as executors, trustees and personal representatives have a legal responsibility to act in the best interests of the estate and beneficiaries throughout the process of settling an estate. Accordingly, fiduciary bonds, alternatively referred to as estate bonds, can be required. Learn more about estate bonds right here.


At Colonial, a leading national provider of all types of fiduciary bonds, the steps to obtaining estate bonds  and all other types of fiduciary bonds are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond from anywhere—even the law office or probate court.


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Good To Do: Inventory Assets and Update

It’s one thing if a residuary estate contains a plethora of personal possessions that make it emotionally difficult for loved ones to deal with–and another if it contains accounts and assets that were left out of a will or trust. Conflicts can ensue and even result in probate litigation. Careful estate planning begins with an inventory of assets, so that everything of importance is accounted for. But estate planning is not a “one and done” effort. Estate plans need to be reviewed and updated every few years to account for changes in assets and families. New acquisitions, as well as financial gains and losses may merit shifts in the plan. So too may changes in capacity, as well as births, marriages, divorces and other life events. As estate planning experts at Leigh Hilton remind us, the absence of updated estate plans can leave families in chaos and conflict, and ultimately result in the application of the  state laws of intestacy to determine the distribution of assets.


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