Abatement of debts and legacies

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

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.


Wikimedia Foundation. 2010.

Look at other dictionaries:

  • abatement of bequest — The process of determining the distribution of the assets left by a testator at his death among the various beneficiaries named in the will, where it appears that such assets are insufficient to pay both the debts of the testator and the expenses …   Ballentine's law dictionary

  • Abatement — may refer to:*Abatement of debts and legacies, 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… …   Wikipedia

  • Germany — /jerr meuh nee/, n. a republic in central Europe: after World War II divided into four zones, British, French, U.S., and Soviet, and in 1949 into East Germany and West Germany; East and West Germany were reunited in 1990. 84,068,216; 137,852 sq.… …   Universalium

  • Lien — For other uses, see Lien (disambiguation). Property law …   Wikipedia

  • abate — /ə bāt/ vb abat·ed, abat·ing [Old French abattre, literally, to knock down, from a , prefix stressing result + battre to beat] vt 1 a: to put an end to or do away with abate a nuisance b: make void: null …   Law dictionary

  • Probate — Not to be confused with Probation. Wills, trusts and estat …   Wikipedia

  • Will (law) — Last Will redirects here. For the 2011 film, see Last Will (film). Wills, trusts …   Wikipedia

  • Intestacy — Intestate redirects here. It is not to be confused with Interstate. Wills, trusts …   Wikipedia

  • Executor — This article is about the legal term. For other uses of the term, see Executor (disambiguation). Wills …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”