Introduction
In its simplest form, ‘residuary’ estate refers to the surplus or residue of the property of the testator. A residuary clause is usually inserted in a will to ensure that properties, even though not specifically mentioned, inadvertently missed and/or subsequently acquired devolve upon the residuary legatee. Further, residuary estate would also include property belonging to the testator at the time of his death, of which he has not made any other testamentary disposition which is capable of taking effect. The illustration to Section 103 of the Indian Succession Act, 1925 explains this.
“Illustration
A by his will bequeaths certain legacies, of which one is void under section 118, and another lapses by the death of the legatee. He bequeaths the residue of his property to B. After the date of his will A purchases a zamindari, which belongs to him at the time of his death. B is entitled to the two legacies and the zamindari as part of the residue.”
Importance of a residuary clause
1. At the time of making a will, it may not be possible to list down every asset of the testator.
2. After the making of a will, a testator may acquire, inherit or receive further assets. In the absence of a residuary clause, the testator would have to either execute a codicil or a fresh will to deal with such assets subsequently acquired.
3. At the time of making a will, certain properties maybe the subject matter of a dispute, the outcome of which is not known. A residuary clause would cover such assets in the event they come to the share of the testator on resolution or settlement of the dispute.
4. After making a will, a testator continues to use and deal with his assets during his lifetime. This may lead to an augmentation or depletion of the properties mentioned in the will. A residuary clause would cover such situations.
5. A residuary clause covers legacies that lapse or are incapable of taking effect.
6. A residuary clause also becomes important if amendment to a probate grant is sought. After obtaining probate, details of assets may come to the knowledge of the executor or family members that were not previously known. In such a situation, amendment to a probate grant can be applied for on the basis of a residuary clause. This often happens in the case of physical shares. At the time of filing the probate petition, the executor will set out the list of all the shares known to him. However, after obtaining probate, dividend maybe received from a company or some communication which is when the executor or family members of the testator learn for the first time that the testator also has shares in such company. In the absence of a residuary clause, it would be very difficult to approach court seeking amendment of grant of probate.
Conclusion
As seen above, a residuary clause serves several purposes and provides for several eventualities that would otherwise be difficult to foresee and provide for in a will.
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