What exactly is the residue and remainder?

Status
Not open for further replies.
L

luvmybabes4ever

New Member
My mother's will states the following:

All the rest, residue and remainder of my property and estate, both real and personal, including my interest in premises -------,ny; -----,ny;and -----,ny I give unto my Trustee, herein named, IN TRUST NEVERTHELESS, for my son --- ,......

Four other specific property gifts were made before this line. The will indicates that all estate taxes shall be paid from principal of residuary estate.

Now once cash is used up if a propert is the next to go, where will the estate taxes be paid from? Do the properties specified above make up the residuary estate or will all heirs be affected?

Please help. I am losing my mind with this because my brother has told me I will have to take out a mortgage on the propery I am getting to split the taxes with him.
 
Specific gifts are NOT residue. The residue is what's left over after the specific gifts have been distributed. The specific gifts don't "go" in any specific order - there is no "next to go", they pretty much go all at once.

You as beneficiary are not liable for estate taxes on the property you inherit - they are paid by the estate. It is the personal representative's responsibility to ensure that the estate taxes are paid. Your mother's will specifies taxes are to be paid from the residue. However, if the residue is not enough to cover the taxes, the representative will have to encroach on the specific gifts. So whoever the personal rep is, they shouldn't go distributing any specific gifts until they know the estate can cover the taxes.
 
But is the property being given to my brother considered to be part of that residue? I know that it was my mother's intention for the two extra properties being left to my brother to cover any needs for the other three properties which we each, my brother, my sister and I live in separately. My brother is now trying to get smart indicating that he wants to hold on to all three properties to reap the benefits of rent from the 2 others. He expects that we should all split any resulting deficit three ways. My hope is that if his properties are consider to be the residue and remainder by which taxes are to be paid, then he will have no choice but to sell the two extras at least and then we can try to work out an amicable way to settle the less. I jost don't see a 33.3% split when one is getting more than 50% of the estate on his own.
Thank you so very much for taking the time to respond.
Having lost both mother and father and my brother still so young (20) there is much strain on our family and it is getting increasingly hard to find some unity because each of us is worrying about ourself instead of trying to work towards all of our benefits.
 
What's the property being given to your brother that you're talking about? How is it dealt with in the will? Whether property given to your brother is part of the residue depends on the wording of the will. If they were specific gifts, they are not part of the residue. You haven't really posted enough for anyone to be able to give an educated guess what's what here. If the extra properties you mention going to your brother are those three going to the Trustee under the residual clause, then those properties going to him are part of the residuary.

Estate taxes are not the same as ongoing expenses. Your mother's will states that estate taxes, not "any needs for the other three properties", are to be paid from the residue.

I would hazard a guess, without knowing the specifics of the will, that the way you get your share of the residue is that the Trustee - who I assume is your brother - holds those extra three properties as trustee. He's entitled to manage them, but he does so for the benefit of the beneficiaries, which I imagine includes you and your sister.
 
The wording for his share is as follows:
FIRST thru Fourth instruct on funeral payment and make specific gifts of real estate to me, my sister, and my uncle (my mother's brother)
FIFTH: "All the rest, residue and remainder of my property and estate, both real and personal, including my interest in premises -------,ny; -----,ny;and -----,ny I give unto my Trustee, herein named, IN TRUST NEVERTHELESS, for my son --- ,......"
(This is later in the will called the Trust estate)

My brother is not the trustee. The trustee of this and my brother's trust and executor of the estate is my mother's lawyer. My brother is only 20 so my mother left her lawyer to be his trustee until age 30.

Elsewhere in her will she states...
"All estate, transfer, inheritance and like taxes, including interest and penalties thereon imposed or assessed by the Federal or State governments or any other duly constituted authority, upon or with respect to property passing under this, my will, or any... shall be paid from the principal of my residuary estate as an expense of administration."

If there is more specific info needed let me know.
Thank you thank you thank you... for all of your time.
 
So there is no specific bequest to your brother. He took the residue, and it is being held in trust for him by the Trustee. The estate and transfer taxes are to be paid by the residue. The will is silent on ongoing maintenance costs of the properties you and your sister inherited by way of specific gift.

To me, this signals that:

a) the various estate and transfer taxes are to be paid from the residue, i.e. your brother's portion of the estate, prior to him receiving it.

b) You do NOT need to mortgage your property to pay the estate and transfer taxes. The executor should pay these out of the residue. If the residue is not sufficient to pay the taxes, the specific gifts to you, your sister, and your uncle may be encroached on - but ONLY if the residue is not sufficient. (I would add that your brother, frankly, is not in a position to be giving you direction, since he is only a beneficiary of the trust and is not charged with settling the will. The executor is. And he shouldn't be giving you direction on paying the estate taxes either - he should do what is necessary, take direction from you all if its appropriate, and distribute what's left. It's not up to beneficiaries to pay taxes.)

On the other hand, I don't see any intention that the income from the properties left to your brother are to be used to subsidize the properties inherited by you and your sister on an ongoing basis. If that was your mother's intention, it's not evident in the will as you've set it out so far. The trustee manages the properties for the benefit of your brother, not for the benefit of anyone else.
 
You are correct. Since my brother is the youngest of us all, her intention was for the 2 extra properties to help sustain him in the long run, not me and my sister. That of course is if the properties remain. I do not think that my mother expected the taxes to be so high. As well, she was not expecting to die anytime soon and was working towards leaving enough so that we would not be in this situation. Things just happened suddenly and progressed very quickly.
Thank you so much for a wealth of information. You nailed this one on the head! I rec'd a very concise answer from you.
Best regards.
 
DEE-DUB... help me again!

"All the rest, residue and remainder of my property and estate, both real and personal, including my interest in premises (ADDRESS 1)-------,ny; (ADDRESS2) -----,ny;and (ADDRESS3)-----,ny I give unto my Trustee, herein named, IN TRUST NEVERTHELESS, for my son --- ,......"

Later the NINTH clause in the will states that all taxes fees etc are to be paide from residuary estate.

I have to bother you again as we are experiencing great difficulty. Are the properties named after rest and residue part of the residuary estate? And if so how are they used to help pay fees and taxes for which there was not enough cash or other liquidable assets to use to pay.

Please help with a reply.
 
Since the clause you just quoted says "residue and remainder...including my interest in premises 1, 2, and 3", I am going to go out on a limb and say that those properties are included in the residue.

Usually it is up to the executor how the fees and taxes are to be paid. The will may provide some direction. If these are income-generating properties, conceivably they may generate sufficient income to pay the fees. If they don't, then the executor probably sells them to pay the taxes.

What is the executor proposing to do?
 
The executor, who is also to be the trustee and was the drafter of the will, my mom's lawyer, claims that the will forms the trust before the paying of estate taxes and therefor the properties are bound by that trust and cannot be touched to help pay those taxes. He wants to pass the burden to the other beneficiaries. I have argued that these properties constitute the residuary estate and should be liquidated to any extent required to satisfy the taxes as was my mother's request in the will to do so out of the residuary estate. Whatever would be left after that, in my opinion, is what makes up the portion to go into a trust.

He has asked all beneficiaries to meet tomorrow, Monday, to go over things so that he can hire a mortgage broker.

Do I demand a formal accounting of the handling of the estate process? And, if so, how much can I expect to pay, ballpark, for something like that?
 
Do I demand a formal accounting of the handling of the estate process? And, if so, how much can I expect to pay, ballpark, for something like that?
Click to expand...

I'm not sure that will solve your problem, and I can only speculate how much it will cost.

I tend to agree with your assessment, as I indicated above. But in absence of seeing the entire will, it is impossible to tell for sure. You should take a copy of the will to your own lawyer for an opinion.
 
I spoke with a lawyer yesterday who is prepared to argue on my behalf. He did review the will I faxed to him and he too, along with his colleagues, agree with my contentions.

My fingers are crossed. Hoipefully this won't cost me my house!... either by improper settling or legal fees.

Thank you again for your time and help. I will let you know how it goes today.
 
Dee Dub,

This meeting was a nightmare! The lawyer started his meeting out by rasing his voice to intimidate me for questioning his authority. " I don't know what your profession or your authority but I have been doing this for 28 years and I have always done it this way."

He had a mortgage broker there and gave us a sheet apportioning the estate taxes and legal fees by each heirs percentage of the estate gained. Additionally, he has accounts with cash and other assets that he did not even apply to the estate taxes and legal fees to bring it down before his pro rata apportionment. He has not provided any of us with anything that spells out how the estate value has been derived other than the property appraisals at my mom's time of death.

And, he even threatened that if I wanted to litigate, he would keep it going so that I would lose everything anyway. According to him he never loses a case.

Additionally, I asked for the alternate valuation 6 months after death and he instructed me to take care of it. He doesn't see the need to cost the estate for yet another valuation... even though values that had frozen relatively high in may came down significantly in november.

This guy is ruthless.

Can you tell me what the average Joe that can't afford a lawyer can do to have this guys handling of the estate investigated. Can I petition the courts myself? If so, who, where,? Or am I going to have to lay out my savings to hire a lawyer and quite possibly wind up destitute?

I am extremely proud and I want to fight this one out~! I hate to see people like this get over. Please tell me how I can do some of the leg work on my own to minimize the legal fees.

DEE DUB please reply again... I am running out of time as estate taxes are due feb 2.
 
What he should have been doing for the past 28 years is following the instructions in the will, whatever they are. Given what you've posted above, it appears he is not following the instructions in the will in this case:

The will indicates that all estate taxes shall be paid from principal of residuary estate.
Click to expand...

He had a mortgage broker there and gave us a sheet apportioning the estate taxes and legal fees by each heirs percentage of the estate gained.
Click to expand...

As I understand it, there is no need for an apportionment to the heirs since the will provides that any taxes are to be paid from the residue. All I can say is, talk to your lawyer about this. IMHO, the executor is not carrying out the will.

As far as legal fees and executor's fees go (and note that the two are not the same, even though the same person may fulfill both roles):

The fees the solicitor is entitled to as executor depend on what the will provides, and the law of your state. Executor's fees in my jurisdiction are determined by the aggregate value of the estate if the will is silent. The value is usually paid from the residue - NOT apportioned to the specific beneficiaries. Consult your lawyer for further advice on this.

The solicitor may not be entitled to fees for legal services (over and above remuneration as executor) unless the will has a charging clause. Again, I don't know the law in your jurisdiction, but often a solicitor acting as executor cannot also charge for legal fees unless the will provides so. And if the solicitor witnessed the will, that provision may be void.

He has not provided any of us with anything that spells out how the estate value has been derived other than the property appraisals at my mom's time of death.
Click to expand...

Unless you have better evidence these are likely to carry the day. That might not be a bad thing - this may not be worth fighting over unless the property values have changed significantly. If they have, talk to your lawyer about getting new appraisals.

And, he even threatened that if I wanted to litigate, he would keep it going so that I would lose everything anyway. According to him he never loses a case.
Click to expand...

Mention this to your lawyer - depending on what he said, there may be grounds for a complaint to the law society.
 
Last edited:
Status
Not open for further replies.

Share this page

Get a free case review from a lawyer
Back
Top