Individuals have a tendency to put off or delay their estate
planning process for various reasons. Some people feel it
is too costly or time consuming, while others have trouble
deciding to whom they want to leave their assets. Once
you have decided how and to whom you want to leave your
assets, it is important you have the correct estate planning
documents in place to carry out your wishes

By creating a trust, and integrating it with your estate planning
and beneficiary designations you make it more likely that all of
your assets will be distributed as you wish.  Many trusts have a
series of specific gifts. But you should be sure that your trust also
contains a residuary clause. A residual clause states what happens
to assets that were not given away by a trust. Once distributions
have been made to heirs, taxes have been filed, and any other debts
have been settled, the money that remains will be covered by the
residual clause. Many times individuals use the residual clause to gift
money or assets to immediate family, extended family, and charitable
organizations. Lastly, by including a residuary clause you are eliminating
any potential problems with any beneficiaries listed within your trust.
 For example, if a beneficiary passes away before you do the money
or assets intended for that beneficiary will be added back to your trusts
“residue” and be covered and distributed by the residuary clause.

If your trust does not include a residuary clause your assets may not
be distributed as you had originally intended or wished. Your assets
might be distributed according to intestate laws. This means that any
remaining assets would be disposed of by probate court. Probate court
actions can be an expensive, time consuming, and frustrating. Therefore,
it is important to include a residuary clause in your trust to avoid confusion
and expense.


To make sure that your trust is up to date and contains the most
important clauses, which protect your assets and heirs, please
contact David M. Frees, III at 888-573-7407 or [email protected]

 

David M. Frees, III
Attorney, Speaker and Author