When it comes to estate planning, legal documents often contain complex terms that can be difficult to understand. One such phrase is residuary legatee and devisee in trust,” which is commonly used in wills and trusts. To make sense of this phrase, it’s important to understand the legal definitions of each term and how they work together in the context of estate distribution. This topic will explore what a residuary legatee is, what it means to be a devisee, and how trusts are used in this arrangement. If you are dealing with a will, acting as an executor, or planning your own estate, understanding these terms is essential for ensuring that assets are handled correctly.
Understanding the Term “Residuary Legatee”
A residuary legatee is a person or entity named in a will to receive the remainder of the estate after all specific gifts, debts, taxes, and expenses have been paid. This part of the estate is known as the “residue” or “residuary estate.” The residuary legatee is often a family member, friend, or charitable organization, depending on the wishes of the person creating the will (the testator).
Key Points About Residuary Legatees
- They inherit what is left over after specific bequests are distributed.
- The residuary estate may include property, cash, investments, or other remaining assets.
- A residuary legatee can be an individual or a legal entity such as a trust or non-profit organization.
For example, if someone leaves $10,000 to a friend, a car to a sibling, and everything else to a residuary legatee, that person will receive whatever remains after the specified gifts have been distributed.
What is a Devisee?
A devisee is someone who receives real property such as land or a house under the terms of a will. This term is distinct from a “legatee,” who generally receives personal property. However, modern legal terminology often uses the word “beneficiary” to cover both types of inheritance. Still, understanding the specific meaning of a devisee is helpful when interpreting formal estate documents.
Difference Between Devisee and Legatee
- DeviseeReceives real estate or immovable property.
- LegateeReceives personal or movable property (such as money, jewelry, or vehicles).
In many wills, someone can be both a legatee and a devisee if they are receiving both real and personal property. The distinction may not matter in everyday language, but it is important in legal contexts.
The Role of a Trust in Estate Planning
A trust is a legal arrangement where one party, the trustee, holds property for the benefit of another party, the beneficiary. Trusts are used in estate planning to manage how assets are distributed after death. A trust can be created within a will called a testamentary trust or it can be a separate document established during the person’s lifetime.
Benefits of a Trust
- Helps manage property for minors or dependents.
- Provides privacy and may avoid probate court.
- Allows for specific instructions on how and when assets should be distributed.
Trusts are especially useful when a person wants to provide for beneficiaries who are not capable of managing assets on their own, such as young children, individuals with disabilities, or beneficiaries who may need financial guidance.
Putting It All Together Residuary Legatee and Devisee in Trust
The phrase “residuary legatee and devisee in trust” combines all the terms we’ve discussed and typically refers to a person or entity who is receiving the remaining assets of an estate (the residue), including both personal and real property, and is doing so through a trust arrangement.
Example Scenario
Suppose Jane writes a will stating that after all debts and specific gifts are distributed, the rest of her estate should be held in trust for her two minor children until they turn 25. In this case
- The trust becomes theresiduary legatee and devisee.
- The trustee manages the assets on behalf of Jane’s children.
- Once the children reach the age specified, the trustee can distribute the remaining property according to the terms of the trust.
This arrangement ensures that the estate is managed responsibly and in accordance with the testator’s wishes, especially when beneficiaries may not yet be able to handle financial matters on their own.
Why Use a Residuary Legatee and Devisee in Trust?
There are several reasons someone might choose to designate a residuary legatee and devisee in trust in their will. These reasons include protecting assets, providing long-term support for beneficiaries, and ensuring specific conditions are met before beneficiaries receive their inheritance.
Common Reasons for This Arrangement
- To provide income over time instead of a lump sum.
- To avoid giving minors control over large amounts of money.
- To protect assets from creditors or mismanagement.
- To include conditions, such as completing education or reaching a certain age, before distribution.
By creating a trust, the testator can exert control over how their estate is managed and distributed long after they are gone, offering peace of mind that their wishes will be respected.
Responsibilities of the Trustee
When someone is named as a trustee for the residuary estate, they have specific legal duties. These include managing the assets prudently, following the terms of the trust, and acting in the best interests of the beneficiaries. Trustees are often close family members, trusted friends, or professional fiduciaries such as attorneys or financial institutions.
Trustee Duties Include
- Filing required legal documents and tax forms.
- Investing assets wisely.
- Keeping records and accounting for all transactions.
- Distributing funds or property according to the trust terms.
Choosing a responsible and knowledgeable trustee is crucial to ensure that the trust operates smoothly and benefits the intended recipients.
Understanding the phrase “residuary legatee and devisee in trust” is essential for anyone involved in estate planning or administering a will. It refers to a person or entity that inherits the remainder of an estate and holds those assets in a trust, usually for the benefit of others. This legal structure provides flexibility, control, and security for managing estate assets, especially when beneficiaries require long-term guidance or protection. Whether you’re writing your own will or interpreting someone else’s, knowing the function of this phrase can help ensure that the estate is handled properly and in accordance with the testator’s wishes.