In one of our recent Deceased Estate matters, Ray and Tony* came to us regarding their late mother Lorna’s Will. Ray and Tony were the executors of Lorna’s Will, which was prepared by another firm.

Lorna was survived by her five children: Ray, Tony, Debra, Ashley and Graham.

Lorna’s estate consisted of the following assets:

    • Her property in Eltham, (the “Eltham property”), valued at approximately $1,200,000;
    • Various Shares, valued at approximately $2,000;
    • Cash in her bank account in the sum of approximately $38,000.

Terms of the Will

In her Will, Lorna gave:

  • A right to reside in the Eltham property to Tony (for as long as he wished, with the option to sell);
  • All money in her bank account to Tony;
  • $20,000 to her grandson Dean;
  • $100,000 to Ray;
  • $100,000 to Debra;
  • $100,000 to Ashley;
  • $100,000 to Graham;
  • Various Shares to Graham;
  • Various miscellaneous bequests.

Significantly, there were insufficient funds in the estate to meet these bequests. Furthermore, Lorna’s Will did not contain a ‘residue clause’.

What is a residue clause?

The residue clause deals with anything left over from the estate after all debts have been paid and bequests have been given. It is important to note that a Will does not specify who is to receive every single asset that is owned by the Willmaker. As a result, the residue clause is a ‘catch all provision’ which deals with the remainder of the Willmaker’s assets which have not been specifically identified in the Will.  

Claim against Lorna’s estate

Graham asserted that he was not adequately provided for under Lorna’s Will. He argued that Tony was being given a disproportionate amount of the estate. As a result, Graham contested Lorna’s Will in the Supreme Court of Victoria (

To support his case, Graham alleged that because there was no residue clause, the remainder of Lorna’s estate should be divided equally between Ray, Debra, Ashley and himself. He argued that Tony was not intended to be included as a residuary beneficiary, due to him being given the right to reside in the Eltham property.

The remaining siblings disagreed with Graham. Ray, Debra, Ashley and Tony were estranged from Graham. In fact, Graham had been estranged from Lorna for the last 15 years of her life. He also failed to attend her funeral. The siblings contended that Lorna’s wishes were for Tony to receive the residue of the estate. This was supported by a handwritten note left by Lorna outlining her intention and instruction to give Tony a right to live in the Eltham property. In this note, Lorna explained her reasons for giving Tony a larger portion of her estate – because he had lived with her and had been her full-time carer for many years prior to her death. Lorna further explained that the monetary bequests in her Will were to be made only after the sale of the Eltham property.

The Court referred the matter to Mediation where, eventually, a settlement was reached. The terms of the settlement were as follows:

  1. The Eltham property was to be sold (with Tony continuing to occupy the property until the date of sale);
  2. The proceeds of the sale to be distributed as follows:
    • $20,000 to Lorna’s grandson Dean;
    • $100,000 to Ray;
    • $100,000 to Debra;
    • $100,000 to Ashley;
    • $100,000 to Graham;
    • The balance then remaining to Tony.

Significance of excluding a residue clause

As demonstrated with Lorna’s estate, the absence of a residue clause in a Will can be highly problematic. Without a residue clause, it is open to interpretation as to how the remainder of the estate is to be distributed. This is particularly the case when the Will provides for an unequal distribution of the estate.

The lack of residue clause can also result in a partial intestacy. This means that although the Will was valid, it failed to distribute all the deceased’s assets. A partial intestacy is avoided by simply including a residue clause, to address all remaining assets which haven’t been specified in the Will.

While Lorna’s handwritten note implied that the residue of her estate was to go to Tony, this was not specified in her Will. Had this been addressed through a residue clause, Graham would have had a weaker claim and the ensuing litigation could have been avoided.  

Another important lesson from this case is that you should only bequeath sums of money in your Will which you can afford. As demonstrated in Lorna’s estate, the Eltham property had to be sold so that the monetary bequests under the Will could be provided for.

To avoid ambiguity and protect your estate against potential claims, it is pivotal that a residue clause is included in your Will.

*Real names have not been used.