Abatement

What it means

When debts, taxes and expenses exceed what is available, gifts have to be cut. Abatement is the statutory order in which that happens.

The residue is normally reduced first, then general gifts of money, and specific gifts last.

A will can set its own order, and where it does, that generally governs.

Why it matters

It decides who actually bears the cost of an estate's debts, and the answer is usually the residuary beneficiaries rather than the people named for specific things.

It is also why a will that leaves several large specific gifts and a small residue can produce an outcome nobody intended.

When you are likely to meet it

• When the estate cannot satisfy everything in the will.
• When beneficiaries ask why one gift was paid in full and another was not.
• When debts turn out larger than expected.

How this varies by state

The order of abatement is set by state law where the will is silent.

Related terms

• AdemptionWhat happens when a will leaves a specific item that no longer exists at death: the gift usually simply fails.
• AdvancementA gift made during life that counts against what that person inherits at death.
• DeviseA gift made by will — historically of land, and in modern statutes of anything.
• Estate accountingA statement of everything that came into the estate and everything that went out, presented before the estate can be closed.
• Insolvent estateAn estate that owes more than it holds. State law then decides who gets paid, in what order, and who gets nothing.
• Residuary estateWhatever is left after specific gifts, debts, taxes and expenses have been dealt with. Most wills give it away in a single clause.
• Specific bequestA gift in a will of a particular thing — a named account, a ring, a car — rather than a share of what is left.
• WillA written document saying who should receive what, and who should be in charge of seeing that it happens.

Sahvelo guidance that uses this

• The will