What if there are not enough assets in the estate to pay all of the expenses?

Robert Ray

Today’s word is abatement.

Estate property is liable for debts and expenses of administration.  How are these paid?  Do all of the beneficiaries share this burden equally?

Texas, like most states, specifies a way that the property abates.  The Executor or Administrator is to follow these guidelines:

  1. If the testator has specified a particular way that the Executor or Administrator is to pay these expenses, that direction must be followed.  If the testator did not specify how to pay these expenses, the following property will be used in the following order;
  2. Property not disposed of by the will.  If that is not sufficient to pay the expenses, then;
  3. Personal property of the residuary estate.  The residuary estate is the catch-all bequest in a will such as “All the rest and residue of my personal property, I leave to my wife.”  Then;
  4. Real property of the residuary estate. Then;
  5. General bequests of personal property.  “I give my son 100 Shares of Exxon.”  Then;
  6. General devises of real property.  “I give my daughter one of my houses in Houston.”  Then;
  7. Specific bequests of personal property.  “I give my son my 100 share of Exxon.” This is similar to #5 but notice the difference.  Then, lastly;
  8. Specific devises of real property.  “I give my daughter my house at 124 Main Street, in Houston.”  This is similar to #6 but notice the difference.

Some of the legal issues that arise from abatement involve the Executor or Administrator making choices that do not follow the statute.  The Executor or Administrator may reduce everybody’s share on a percentage basis rather than following the statutory formula.  He might also use one person’s share to pay all of the expenses even though someone else’s property should have been used first.

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The Author

Robert Ray

Robert Ray handles inheritance disputes of all kinds. He takes cases throughout Texas.
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