Construction of Wills, Trusts, and Other InstrumentsAbatement
Section § 21400
This law section says that if a will or trust specifies how assets should be reduced, or if following the regular rules would mess up the transferor's plan or purpose, then the assets will be reduced in a way that sticks to the original plan or goal. Basically, what's written in the will or trust takes priority over standard asset reductions.
Section § 21401
This law explains how a person's estate is distributed when there aren't enough assets to cover debts, expenses, and specific gifts after their death. Generally, all beneficiaries share this shortfall equally, and there's no preference given to real estate over personal belongings. Exceptions include provisions for a spouse or children who may have been omitted from the will, and certain tax-related situations.
Section § 21402
This law lays out the order in which gifts or shares to beneficiaries are reduced or eliminated if there isn't enough in the estate to satisfy them all, known as 'abatement.' First, property not mentioned in the will is affected, followed by the remaining assets left after specific gifts are distributed ('residuary gifts'). General gifts to non-relatives are next, then general gifts to relatives. Lastly, specific gifts to non-relatives are reduced before specific gifts to relatives. A 'relative' refers to someone who would inherit under California's rules for dying without a will, assuming no one else has a higher claim.
Section § 21403
This law explains how the distribution of a deceased person's estate is handled when there isn't enough money to fulfill all bequests. It requires that beneficiaries' shares are reduced proportionally within each category of gifts. If the gift is an annuity or has a specified source, it's considered a specific gift if it can be fulfilled with the specified source. Otherwise, it's treated like a general gift, meaning it's fulfilled from any available assets.
Section § 21404
This law means that if a specific gift in a will or trust is meant to be free of any loans or liens, other specific gifts do not have to be used to pay off these debts. Essentially, the responsibility to clear any debts, like a mortgage, from the gifted property does not come from other specified gifts or property in the estate.
Section § 21405
This section explains what happens when an estate doesn't have enough assets to pay all its debts and distributions, a situation known as abatement. The court will decide how much each person set to receive a distribution must give up to help cover these shortfalls, and the personal representative will adjust the distributions accordingly. If a specific item or property was promised to someone and needs to be taken away, that person can use other personal property to cover the shortfall instead.
Section § 21406
This section explains that if a gift was made before July 1, 1989, the rules that existed before this new part were enacted will apply to that gift. In essence, it ensures that old gifts are judged by old laws.
Additionally, it specifies that if the gift is made through a will, the official date of the gift is considered the date when the person who made the will passes away.