There are many terms that you must know when working through estate administration or when drafting a will in New Jersey, from beneficiary to fiduciary. While these are more common, one you may not have heard as often is "residue." When it comes to a will or an estate, what is the residue?
Essentially, this is just any money or assets that are left over when all other points of the will have been addressed. Naturally, it's very hard for someone to mention every single item that is owned in a will. At the end, the will may stipulate that the executor can simply split up all of the remaining assets as he or she sees fit. This fund is the residue.
For example, a man could pass away after his wife, leaving two children and one grandchild. He may have specific things that he wants done with some of his money, such as giving $200,000 to each child and using the remaining $200,000 to create a trust fund for his grandchild. He may then direct that the family home be sold so that the money is easier to divide, and he may give distinct property -- a car or a family heirloom -- to whoever desires it.
With this out of the way, everything else is considered residue and is distributed in accordance with the will. Some executors are given the power to hold auctions or sell items on their own, seeing as how cash is easier to split up than many smaller items. This can sometimes be a point of contention, however, if family members want items that have been set aside to be sold.
Source: American Bar Association, "Guidelines for Individual Executors & Trustees," accessed May 28, 2015