When drafting a will, most people focus on distributing specific assets to their loved ones. However, what happens to the assets that are not explicitly mentioned? This is where a residuary clause plays a crucial role. A well-drafted will should always include a residuary clause to ensure that all remaining assets are distributed according to the testator’s wishes.
What is a Residuary Clause?
A residuary clause is a provision in a will that dictates how any remaining assets—those not specifically allocated to beneficiaries—should be distributed. These assets could include forgotten bank accounts, unexpected inheritances, or newly acquired properties after the will was written. Essentially, a residuary clause acts as a safety net, ensuring that no part of your estate is left without a designated recipient.
Why is a Residuary Clause Essential in a Malaysian Will?
- Covers Unspecified Assets It is nearly impossible to list every single asset in a will. Over time, new assets may be acquired, and some may be overlooked. A residuary clause ensures these are included in the distribution process.
- Prevents Partial Intestacy If a will does not account for all assets, the unmentioned portion of the estate will be distributed according to Malaysian intestacy laws. This means that assets may go to unintended heirs, creating legal complications and family disputes.
- Simplifies Estate Administration Without a residuary clause, the executor of the will may face unnecessary legal hurdles in distributing unallocated assets. This can lead to delays, increased legal costs, and a prolonged estate administration process.
- Ensures Your Wishes Are Fully Honored By including a residuary clause, you maintain full control over how all your assets are distributed. This prevents any part of your estate from being divided in a way that contradicts your intentions.
What Happens If You Don’t Include a Residuary Clause?
Leaving out a residuary clause can lead to significant legal and financial complications, including:
- Assets Being Distributed According to Intestacy Laws: In Malaysia, if a residuary estate is left unassigned, it will be divided based on the Distribution Act 1958 (for non-Muslims) or Faraid (for Muslims). This may result in unintended beneficiaries receiving your wealth.
- Potential Disputes Among Beneficiaries: Family members may argue over unallocated assets, leading to legal conflicts that could strain relationships and prolong the estate administration process.
- Delays in Estate Settlement: Without clear instructions, the executor may need to seek court intervention to determine the rightful recipients, leading to unnecessary delays and additional legal expenses.
Conclusion
A residuary clause is a vital component of any well-structured will. It ensures that all assets, whether named or unnamed, are distributed according to your wishes, preventing legal disputes and unnecessary complications. Whether you are drafting a new will or updating an existing one, including a residuary clause is a simple yet powerful way to secure your legacy and provide clarity for your loved ones.
At DWS Wealth Partners, we specialize in digital will-writing services that make estate planning seamless and comprehensive. Contact us today to ensure that your will is legally sound and includes all essential provisions, including a residuary clause.
