A residuum in estate planning refers to the part of the estate that remains after the estate has disposed of property that the testator bequeathed in a will and after the estate pays the taxes due and settles all debts. It’s also called a residue. A residue, or remainder estate, is the part of the testator estate that remains after one or more parts of the estate is designated, distributed to others, or otherwise separated.
There is also a residuum rule used in hearings that pertains to the evidence necessary for administrative agencies to reach a decision. The rule states that the administrative agency hearing a case must have at least a minor amount of legal evidence that supports a ruling or decision. Administrative agencies, unlike courts, can consider hearsay evidence, but those agencies cannot rely solely on that evidence under the residuum rule.
Individuals who want to leave a portion of their estate to a beneficiary in a will but may not know what that estate will consist of when they die use the concept of residuum. They also use it to make sure that all of what they own at the time of executing the will or in the future is covered in case other provisions of the will do not address all of the property they own. For example, a testator can include a residuary clause in a will, leaving the residuary estate to a designated beneficiary and detailing how it’s to be divided if more than one beneficiary is named. A statement such as, “I give the rest or remainder of my estate,” or a similar statement is common in wills that apply the residuum principle. Without the residuum principle, some of the testator’s property may be subject to probate court proceedings.
Hearsay evidence is a statement that is not made under oath in court, and the party who offers the evidence offers it as truth. Court rules often ban hearsay evidence because it’s not possible for the opposing party to cross examine the person making the statement to test whether it’s true or accurate. Administrative agencies do not often have the same hearsay rules of civil and criminal courts, and hearsay is admissible. If agencies want their rulings to be upheld when it’s reviewed, then the case needs some legal evidence and not just hearsay evidence. Many jurisdictions do not follow the residuum rule because of the restriction it places on administrative agencies.