Which term describes reductions when assets are insufficient?

Which term describes reductions when assets are insufficient?

• A. LAPSE (WILLS)
• B. ABATEMENT (WILLS)
• C. OMITTED SPOUSE (WILLS)
• D. Gifts to Children (WILLS)

Answer: (B)

Abatement is the term for reductions when assets are insufficient to satisfy all bequests and expenses in an estate. When the estate doesn’t have enough property to pay debts, admin costs, and every gift in the will, the gifts are trimmed to fit the available assets. This happens according to a prescribed order set by law or by the will, prioritizing paying debts first and then distributing whatever remains among beneficiaries. For example, if after debts and expenses only a portion of the intended gifts can be funded, the bequests are reduced proportionally or by a defined hierarchy to avoid distributing more than the estate can provide. Lapse refers to a gift failing if the beneficiary dies before the testator; an omitted spouse is about a spouse who was left out; gifts to children describe types of bequests, not the reduction process.

Abatement is the term for reductions when assets are insufficient to satisfy all bequests and expenses in an estate. When the estate doesn’t have enough property to pay debts, admin costs, and every gift in the will, the gifts are trimmed to fit the available assets. This happens according to a prescribed order set by law or by the will, prioritizing paying debts first and then distributing whatever remains among beneficiaries. For example, if after debts and expenses only a portion of the intended gifts can be funded, the bequests are reduced proportionally or by a defined hierarchy to avoid distributing more than the estate can provide. Lapse refers to a gift failing if the beneficiary dies before the testator; an omitted spouse is about a spouse who was left out; gifts to children describe types of bequests, not the reduction process.