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What is the "Residue" of a California Probate Estate and Why Does it Matter for my California Probate Lawsuit?

Estate Law Probate Residue.jpg

What does residue mean as a legal definition, and how is it important in a California probate lawsuit? "Residue" means remainder - the remainder of an estate that is not otherwise distributed. Such a remainder is often a critical financial element of a probate. A "Residuary" clause in a Will or Trust is sometimes called an "omnibus clause." That is a clause that often identifies the beneficiaries who are to receive remaining property not otherwise disposed of, after-discovered property or payment on unforeseen contingencies. It can be simple or sometimes quite tricky as to what is remaining property.

As an example - if a Will or Trust provides that $10,000 is to go to Jim and $10,000 to Julie with the remainder to Gary, a $25,000 estate would yield $10,000 each to Jim and Julie and the remaining $5000 to Gary. If property is later discovered, depending on the language in the residuary of omnibus clause, the newly discovered property will likely go to Gary. This is so whether the amount is large or small.

California probate litigation can arise from a multitude of documents, residuary clauses, beneficiary designations and a host of other issues. Litigation with regard to the residue is often hard fought and full of interesting twists and turns. The residue may be a deposit on a utility account or a long ignored securities account with thousands of shares of utility stock. You can see how residue becomes important.

A close reading of the Will, Trust and other estate documents (including retirement accounts, bank accounts, insurance policies, safe deposit records and securities) must be made in order to make a preliminary determination of residue. The nature of a residuary clause is that things that are not otherwise expressly mentioned go into the residue. "I give my fancy red sport coat to my cousin Gary." If I don't specifically mention my orange tuxedo or otherwise generally mention it ("all my personal property to Gary"), then the orange suit goes into residue and is distributed to the heirs or beneficiaries mentioned in the residue clause.

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Some gifts in an estate are best left ungiven. Image: New Line Cinema

Residue is often comprised of failed gifts. It might be that the heir of the failed gift doesn't want it ("I don't want a 1964 Pink Plymouth Valiant") or that the heir predeceased the decedent ("He's been gone for years.") Sometime heirs can't be located - "we last heard that he was in India somewhere or he might be in the Congo." Sometimes the heir waives the right to the gift - "I don't want nuthin' from no one." Whatever the circumstances when there are probate, estate and trust fights over residue (1) the assets need to be accounted for, (2) the rightful heirs of the residue must be identified, and (3) and orderly distribution determined (by order or stipulation).

As California litigators often appearing in Sacramento, Central Valley and Bay Area Superior Courts we are familiar with residue clauses and the nuances that affect them. Do you want to learn more? Feel free to call us.


Call Mike Hackard at Hackard Law.

(916) 313-3031

Hackard@hackardlaw.com

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