Section § 21400

Explanation

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.

Notwithstanding any other provision of this part, if the instrument provides for abatement, or if the transferor’s plan or if the purpose of the transfer would be defeated by abatement as provided in this part, the shares of beneficiaries abate as is necessary to effectuate the instrument, plan, or purpose.

Section § 21401

Explanation

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.

Except as provided in Sections 21612 (omitted spouse) and 21623 (omitted children) and in Division 10 (commencing with Section 20100) (proration of taxes), shares of beneficiaries abate as provided in this part for all purposes, including payment of the debts, expenses, and charges specified in Section 11420, satisfaction of gifts, and payment of expenses on specifically devised property pursuant to Section 12002, and without any priority as between real and personal property.

Section § 21402

Explanation

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.

(a)CA Probate Code § 21402(a) Shares of beneficiaries abate in the following order:
(1)CA Probate Code § 21402(a)(1) Property not disposed of by the instrument.
(2)CA Probate Code § 21402(a)(2) Residuary gifts.
(3)CA Probate Code § 21402(a)(3) General gifts to persons other than the transferor’s relatives.
(4)CA Probate Code § 21402(a)(4) General gifts to the transferor’s relatives.
(5)CA Probate Code § 21402(a)(5) Specific gifts to persons other than the transferor’s relatives.
(6)CA Probate Code § 21402(a)(6) Specific gifts to the transferor’s relatives.
(b)CA Probate Code § 21402(b) For purposes of this section, a “relative” of the transferor is a person to whom property would pass from the transferor under Section 6401 or 6402 (intestate succession) if the transferor died intestate and there were no other person having priority.

Section § 21403

Explanation

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.

(a)CA Probate Code § 21403(a) Subject to subdivision (b), shares of beneficiaries abate pro rata within each class specified in Section 21402.
(b)CA Probate Code § 21403(b) Gifts of annuities and demonstrative gifts are treated as specific gifts to the extent they are satisfied out of the fund or property specified in the gift and as general gifts to the extent they are satisfied out of property other than the fund or property specified in the gift.

Section § 21404

Explanation

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.

If an instrument requires property that is the subject of a specific gift to be exonerated from a mortgage, deed of trust, or other lien, a specific gift of other property does not abate for the purpose of exonerating the encumbered property.

Section § 21405

Explanation

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.

(a)CA Probate Code § 21405(a) In any case in which there is abatement when a distribution is made during estate administration, the court shall fix the amount each distributee must contribute for abatement. The personal representative shall reduce the distributee’s share by that amount.
(b)CA Probate Code § 21405(b) If a specific gift must be abated, the beneficiary of the specific gift may satisfy the contribution for abatement out of the beneficiary’s property other than the property that is the subject of the specific gift.

Section § 21406

Explanation

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.

(a)CA Probate Code § 21406(a) This part does not apply to a gift made before July 1, 1989. In the case of a gift made before July 1, 1989, the law that would have applied had this part not been enacted shall apply.
(b)CA Probate Code § 21406(b) For purposes of this section a gift by will is made on the date of the decedent’s death.