Abatement of bequests refers to the legal process by which a will or estate plan is adjusted to address a shortfall in the available assets to satisfy all debts, expenses, and bequests after a person’s death. When a decedent’s estate does not have enough assets to cover all specific bequests, the law requires that certain adjustments be made to ensure that the estate’s obligations are met.
In detail, when an estate is administered, all debts, taxes, and administrative expenses must be settled before any distributions to beneficiaries can occur. If the total value of the estate is insufficient to cover these obligations along with all bequests, the bequests may need to be "abated." This means that some or all beneficiaries may receive a reduced share of their intended gifts or, in some cases, nothing at all, depending on the priority of the bequests.
Bequests generally fall into three categories:
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Specific Bequests – These are gifts of a particular item or sum of money to a named beneficiary.
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General Bequests – These are gifts of a general amount or type of property that may be paid from the estate’s assets.
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Residuary Bequests – These are gifts of what remains of the estate after all debts, expenses, and specific and general bequests have been paid.
When bequests are abated, the order of abatement typically follows statutory rules or the directions specified in the will. For instance, specific bequests are often reduced first, followed by general bequests, and finally, residuary bequests, which are last in line to be diminished.
For example, if a decedent’s will bequeaths $10,000 to one beneficiary, a specific piece of property to another, and there are debts totaling $15,000, the specific bequest might be reduced or eliminated to ensure creditors are paid first, resulting in an abatement of the gifts.
Understanding the concept of abatement of bequests is crucial for both estate planning and probate, as it directly affects how an individual’s wishes are carried out after their death and can significantly impact beneficiaries’ expectations.
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