Abatement of debts and legacies

This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. Find sources: "Abatement of debts and legacies" – news · newspapers · books · scholar · JSTOR (September 2010) (Learn how and when to remove this message)

Look up abatement in Wiktionary, the free dictionary.

Wills, trusts and estates
Part of the common law series
Wills
Legal history of wills 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 No-contest clause Property disposition Lapse and anti-lapse Ademption Abatement Satisfaction of legacies Acts of independent significance Elective share Pretermitted heir
Trusts
Express Resulting Constructive Common types Bare Discretionary Accumulation and maintenance Interest in possession Charitable Purpose Incentive Other types Protective Spendthrift Life insurance Remainder Life interest Reversionary interest Testamentary Honorary Asset-protection Special needs Supplemental needs Governing doctrines Pour-over will Cy-près doctrine Hague Convention (conflict law) Application in civil law Dishonest assistance
Estate administration
Intestacy Testator Probate Power of appointment Simultaneous death Slayer rule Laughing heir Advancement Disclaimer of interest Inheritance tax
Related topics
Advance directive (Living will) Blind trust Forced heirship Totten trust
Other common law areas
Contract Tort Property Criminal law Evidence
v t 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.^[1][2]

Also, 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.^[1]

The order of abatement is usually:

1. Intestate property
2. The residuary of the estate
3. General Devises—i.e., cash gifts
4. Demonstrative Devises—i.e., cash gifts from a specific account, stocks, bonds, securities, etc.
5. Specific Devises—i.e., specified items of personal property, real property, etc.

Non-probate property—i.e., life insurance policies—do not abate.