If you have a will, it is customary and very important to include what is known as a residuary clause, leaving any property not otherwise accounted for to a designated beneficiary or beneficiaries. After payment of your debts and taxes, and satisfaction of specific bequests (gifts of personal property) and devises (gifts of real estate), what remains in your estate is known as your residuary estate. This residuary estate will pass to your designee(s) as you instruct in the residuary clause of your will.
In some wills, after payment of debts and taxes, there are no specific bequests or devises, and the entire estate remaining is left by way of your residuary clause to a designated beneficiary or multiple beneficiaries, without explanation or description as to what this residuary estate consists of.
In other estates, many of the high-value items are identified and specifically left to named beneficiaries, and the residuary estate is intended only to cover any items unintentionally omitted, or obtained by the decedent after the execution of the will, or a gift that has lapsed due to the named beneficiary having predeceased the testator.
In the case of a “lapsed” gift, if you wish to avoid a particular gift defaulting to the residuary clause, it is best to name alternate beneficiaries of that gift who take if the primary beneficiary should predecease the testator.
Failure to include a residuary clause could result in property not specifically identified in your will passing to heirs by operation of law, as if you died without a will as to those assets.
In any event, it is wise to identify and list your assets of value, and to keep this ongoing list with your important documents, to assist in the process of administering your estate after you have passed away.