Residuary Clauses
Published on 29 August 2022, 07:22:56 AM
New investments or new possessions — do you really need to revise your Will each time?
Axess Law writes residuary clauses into personal Wills. They save you the time and trouble of making amendments or codicils that often confound or confuse estate trustees or a court.
Our lawyers for Wills and estates (Ontario) ensure the “rest, residue and remainder” of your estate goes where you want, after executors, taxes and debts are paid and beneficiaries gifted.
Why Make Residuary Clauses
Your Will includes specific gifts for beneficiaries you named. But financial assets and personal belongings change in time. Revising your Will every time is tedious and expensive.
You had a condo in Thunder Bay and a cottage in Niagara Falls when you wrote your Will. Now the condo is sold and the cottage is a rowhouse in Mississauga you own with a common law partner. Who inherits what?
Axess Law offers you options. You can make new Wills regularly, for a fraction of what you would pay a traditional legal service, or add a residue clause in Wills.
What’s in a Residuary Clause
You can have as many residuary beneficiaries as you desire and leave (almost) anything you want in a residuary clause.
Making Bequests for Financially Dependent Kin
Most of your Will may be residuary, except for a few modest financial gifts you give to friends. Bequests you are legally obligated to leave financially dependant kin, like spouses, minors and adult children with disabilities, are included outside of your estate residue.
Avoiding Redoing Wills
Including a residuary clause captures new and treasured assets. Real estate you may buy later is disposed of in your Will without having to reopen and revisit it. Personal property, like valued photo albums you might otherwise forget, also has a place. Your Will’s residuary clause includes anything of personal or financial value.
Dividing Shares for Kin
Once bequeaths are made, whatever is left can be distributed to any or all of your beneficiaries in fractions or shares. You can even divide it up in portions among grandchildren or their children (per stirpes, meaning branches of your extended family).
Leaving residue in whole or part to personal causes can be gratifying. Keeping residuary clauses general prevents your Will from failing if charities or nonprofits you specify are no longer around.
Predeceased by Beneficiaries
Your Will is drafted to bequeath gifts to beneficiaries you expect to outlive you.
When beneficiaries predecease you or die before your Will is distributed, their gifts are considered ‘lapsed’. Stating clearly in your Will who receives undistributed gifts prevents misunderstandings by beneficiaries who believe they should inherit next.
You may prefer for your estate to go to your alma mater if gifted beneficiaries are gone. Assuming all your beneficiaries will survive you and not making alternate plans could result in their lapsed gifts going to unintended parties, like distant relatives.
Axess Law ensures your estate trustees know your final wishes for leftover assets after gifts in your Will are distributed to surviving kin and friends. Making plans explicit prevents unclaimed parts of your estate from being subject to intestacy laws.
Here’s what happens if a residue clause fails due to a beneficiaries’ death or is left out of your Will.
Think estate planning is complicated? See Whatever Happened to Prince’s Estate.
How Partial Intestacy Works
Dying with a Will but undistributed assets puts your estate into partial intestacy. Ontario’s Succession Law Reform Act comes into play and a probate court decides what to do with the remaining amount.
Just as if you died without any Will, the first $200,000 goes to your spouse. Any amount bequeathed in your Will is deducted from this. The balance is split by your spouse and children or, if you have no children, by siblings, nieces or nephews or other next-of-kin, in that order.
For example, if $350,000 is unbequeathed and your Will left your spouse $165,000:
- Your spouse receives a preferential share of $200,000 of the $350,000, minus their $165,000 bequest ($200,000-$165,000=$35,000).
- If you have no children, your spouse receives the remaining $315,000 ($35,000+$315,000=$350,000+$165,000=$515,000).
- But if you have surviving children, they split the remaining $315,000 equally with your spouse.
- When you have no surviving spouse or children, your parents share the $315,000.
- Then siblings, if both parents are deceased.
- When a sibling predeceases you, their children (your nieces and nephews) inherit their share.
- And so on.
When no survivors exist, a residuary clause can redirect the remainder to charities.
Otherwise, that part of your estate goes to the province.
Leave your estate to charity.
Flat Rate Legal Services
Adding residuary clauses to Wills is just good planning. You could rewrite Wills every time you added assets or personal property to your estate. It’s an option. Making residuary clauses costs little and takes care of assets or belongings you may have overlooked.
Axess Law’s low flat rate fees start at just $199.99 for personal Wills or $149.99 each for couples, plus HST. Our cheap Wills lawyers in Greater Toronto Area or Ottawa let you update your Will any time you need to, without paying traditional lawyer fees.
Book Lawyers Nearby, Toronto Area or Ottawa
Our Wills and estate lawyers meet with you in person at any of Axess Law locations in Greater Toronto Area or Ottawa. Remote online video conferencing lawyers are available 7 days a week, anywhere in Ontario.
Use our easy online booking form to make appointments or find a Wills lawyer near you by dialing our 1-647-479-0118 lawyer line (toll free to 1-877-402-4277). We have onsite parking and easy access to public transit.
