Legal Tip 129: Gifts in a will and Residue – someone missing out

Gifts in a will and Residue – someone missing out

When someone is left the ‘residue’ of an estate they could have their gift reduced or miss out completely if nothing is left.

Example NSW law
Dad leaves $20,000 to his son and the residue of his estate to his daughter. He has $40,000 in assets when he does his will so he thinks that fair as they should get 50/50.

Dad soon after dies and the funeral costs $10,000. Who will miss out?

Dad’s funeral must be paid first, so his cash left over is now $30,000. But because he gave a specific gift this will reduce the residue of the estate.
Son will get $20,000
Daughter will get $10,000

 

In this scenario, I doubt a family provision would be worthwhile but it only goes to show that the testator should think through properly before a Will is drafted. If the residue of the estate was left to both kids, each will get $15,000.