In some cases, the estate may be insufficient to pay all of the devises made in the Will. Generally, the Will has a provision to deal with this problem, directing the order or method by which devises should be reduced. However, if the Will does not contain such a provision, the Arizona Probate Code provides for a default order of “abatement,” or the reduction or elimination of each devise where there is insufficient property to fulfill the devise.
Under Arizona state abatement rules, the shares of the estate are reduced or eliminated in the following order:
- Property that was not disposed of in the Will.
- Property left to residuary devisees.
- Property left to General devisees.
- Property left to Specific devisees.
If at all possible, bequests should be distributed “in kind” or in the form in which the decedent devised the property. For example, if the decedent left someone his piano, it is preferable to give that person that piano. However, in instances where there are undivided interests in the property, for example if the piano had been left to two people to share, and it is not practicable for it to be distributed jointly to them, the personal representative may liquidate the property and make distributions in cash in proportion of the ownership instead.
If a person is both a general devisee and a specific devisee, they are considered to be a specific devisee to the extent of the property specifically left to them, and a general devisee to the extent of their share of the general property distribution. So if a person were left a share of the general assets and the piano, the piano portion of their devise would not be reduced until all the general assets had been exhausted.
If there is disagreement between the beneficiaries, the personal representative may distribute the property according to an alternate proposal if the all beneficiaries can agree. In some cases you may be able to better meet the desires of the devisees by creating an alternate plan if the testator did not specify an abatement order and significant deficit in the estate has cause abatement that has skewed the distribution from the testator’s intentions. For example, some people will be more interested in specific assets than cash and may thus want to give up some cash to another devisee in order to keep the specific asset, while that other devisee is more interested in the additional cash. In that case, an alternate plan will make more sense.
The order of abatement is a very complicated process in application. A competent probate attorney can assist you with this process.