Abatement occurs in a situation when an estate is too small to deal with the administration expenses and creditor’s claims alone that would occur. This means that a process of allocating the scarce resources that do exist has to take place. The process of doing this is called abatement.
This blog will be consist of a brief overview of the process of abatement, what the steps in the process are and what challenges might occur.
The will might have already have laid out details as to what the order of abatement will be and what priorities will be given. If this has not been done in the will by the testator of the estate, then the state will impose set rules that determine what order the process of abatement will take.
For example, common law holds that gifts of personal property of any kind should abate before any real property. Several states follow the common law rule of abatement, and in these states, the set order of abatement goes as follows:
- Personal physical or financial property that is passing by intestacy
- Personal physical or financial property in the estate
- General legacies
- Demonstrative legacies
- Specific bequests of personal property
- Real property is the last resort to be abated
In the majority of states, there is no distinction made between whether property is real or personal, but the abatement process follows the same order as above. The process of abatement is a complex one and requires careful research to ensure that the estate is abated in the testator’s best wishes. If you have any questions or would like to consult one of our Quinn Law Firm attorneys that specialize in Estate Planning and Estate Administration, please contact us at 814-806-2518.
Source: National paralegal, “Ademption and abatement,” accessed Aug. 23, 2017