Florida probate administration has statutory rules governing what should happen if there are simply not enough assets to pay all the distributions identified in an estate. These statutory rules are known as the rules of abatement. These statutory rules will control unless the Last Will and Testament admitted to probate Court in Florida has a specific set of rules for which property should be satisfied or liquidated to pay an expense of administration.
STEP 1 – IDENTIFY THE CLASS OF GIFTS IN YOUR LAST WILL AND TESTAMENT
Florida law recognizes different categories of gifts. They are as follows
a) Specific gift: As the name implies, this is a specific asset of the decedent devised to a beneficiary. These gifts can only be satisfied by giving the person the specific item of property. If the item does not exist at the time of the death of the decedent, that gift or devise fails, meaning that the provision is not enforceable and the beneficiary is not entitled to an item of equivalent value.
Example: To my daughter Angelina, I give my engraved hunting rifle
b) Demonstrative Gift: A bit of a hybrid of the previous two, a demonstrative gift is a gift payable out of a particular source, but if not available then out of the general assets of the estate.
Example: I give 200 shares of Z Corp to my daughter Angelina if she survives me. This is to be paid from my Z Corp shares which I have at death if it exists, otherwise my Personal Representative shall make provision for payment of the equivalent value of 200 shares of Z Corp from other assets in my estate then existing at my death.
c) General Gift: General gifts are payable from the general assets of the property and may be satisfied from a range of assets in the estate. Importantly, unlike a specific gift, if this item does not fail if it does not exist at the time of death.
Example: To my daughter Angelina, I give a 2016 Nissan Rogue, if I do not own such a vehicle at my death I direct my Personal Representative to purchase one and provide it to her.
d) Residuary Gifts: The term residue, or “rest, residue and remainder” of an estate is the catch all for the remaining assets after all specific assets have been distributed.
Example: “I give the rest, residue and remainder of my estate wherever situated whether it be personal or real property to my wife.” (more…)