The legal landscape of estate planning has become increasingly complex. As a business professional, you may have come across the term “residuary bequest” but don’t know exactly what it means or how to handle it. A residuary bequest is a legal bequest that is left to a person or organization after all other bequests are given. In a will, the residuary bequest is the remaining estate left after any specific gifts, taxes, and other estate costs have been deducted.
The Basics of a Residuary Bequest
A residuary bequest is generally the last bequest in a will or estate plan. It represents the remaining estate after the deceased has paid all taxes, debts, and other fees. The residuary bequest can go to any particular person or organization that the deceased has chosen. Additionally, the bequest can be divided between different individuals in any percentage as specified in the will.
Considerations When Setting Up a Residuary Bequest
When setting up the residuary bequest, the primary consideration that must be kept in mind is taxation. Depending on the size of the estate and the laws in the state, different taxes may be applicable to the residuary bequest. Additionally, businesses and other organizations may be subject to different taxes, depending on the structure of the bequest. It is important to have a qualified lawyer advise on the residuary bequest to ensure it is set up in the most tax-effective manner.
The Impact of a Residuary Bequest on Estate Planning
A residuary bequest is a powerful estate planning tool that can be used to ensure that assets are transferred effectively and can be used to benefit individuals or organizations of the deceased’s choosing. By using a residuary bequest, a person can easily make sure that the majority of their estate will be passed on to their chosen beneficiaries. It can also be used to provide tax relief, as the residuary bequest can be structured in such a way as to minimize any potential taxes.
Conclusion
A residuary bequest is an important estate planning tool that can be used to benefit individuals and organizations. With the help of a qualified lawyer, a residuary bequest can be set up to pass on the majority of a person’s estate to their chosen individuals or organizations. Additionally, it can be used to minimize any potential taxes by carefully structuring the bequest. The significance of a residuary bequest cannot be overstated and it should be taken into account when making any estate planning decisions.