Abatement

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Abatement is the statutory order in which assets are used towards expenses, liabilities and debts. This order is dependent on whether the estate is solvent or insolvent. Where the estate is insolvent (the estate is insufficient to meet its liabilities), all gifts in the Will fail, as everything will be used to meet the estate’s liabilities. Where the estate is solvent (the estate is sufficient to meet its liabilities), the order in which assets are used to cover liabilities is covered by the First Schedule of the Administration of Estates Act 1925, however, to fully understand the order stated in the 1925 Act a distinction should be made between the various types of gifts that can be made in a Will. Specific gifts are gifts of some particular identifiable possession or item that is a distinguishable part of the Testator’s estate. For example, gifts of chattels, jewellery, real property or…

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