Abatement of debts and legacies

Wills, trusts and estates

Part of the common law series

Wills

Wills (legal history) Joint wills and mutual wills Will contract · Codicil Holographic will · Oral will

Sections Attestation clause Residuary clause Incorporation by reference

Contest Testamentary capacity Undue influence Insane delusion · Fraud

Property disposition Lapse and anti-lapse Ademption · Abatement Acts of independent significance Elective share Pretermitted heir

Trusts

Express · Constructive Resulting

Common types Bare · Discretionary Accumulation and Maintenance Interest in possession Charitable · Purpose · Incentive

Other types Protective · Spendthrift Life insurance · Remainder Life interest Reversionary interest Honorary · Asset-protection Special needs (Supplemental Needs)

Governing doctrines Pour-over will Cy-près doctrine

Estate administration

Intestacy · Testator · Probate Power of appointment Simultaneous death · Slayer rule Disclaimer of interest

Related topics

Living will (advance directives) Totten trust

Other common law areas

Contract · Tort · Property Criminal law · Evidence

v • d • e

Abatement of debts and legacies is a common law doctrine of wills that holds that when the equitable assets of a deceased person are not sufficient to satisfy fully all the creditors, their debts must abate proportionately, and they must accept a dividend.

In the case of legacies when the funds or assets out of which they are payable are not sufficient to pay them in full, the legacies abate in proportion, unless there is a priority given specially to any particular legacy. Annuities are also subject to the same rule as general legacies.

The order of abatement usually goes as follows:

1. Intestate property (property not disposed of in the will itself) will abate first
2. The residuary estate will abate next
3. General devises (gifts of cash) will abate next
4. Demonstrative devises (gifts of stock, or orders to sell property and give the proceeds to the beneficiary) will abate next
5. Specific devises (gifts of tangible property) will abate last

[edit] Definitions

A specific devise, is a specific gift in a will to a specific person other than an amount of money. For example, if James's will states that he is leaving his $500,000 yacht to his brother Paul, the yacht would be a specific devise.

A general devise, is a monetary gift to a specific person to be satisfied out of the overall estate. For example, if James's will states that he is leaving $500,000 to his son Sam then the money would be a general devise.

A residual devise is one left to a devisee after all specific and general devices have been made. For example James's will might say: "I give all the rest, residue and remainder of my estate to my daughter Lilly." Lilly would be the residual devisee.

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