Abatement happens when there isn’t quite enough in the estate to give everyone their gifts. Let’s say you are leaving $10,000.00 to each of ten grandchildren, but your estate ends up being only $80,000.00. There is money in the estate, just not the $100,000.00 that you will need. In that case, you would figure out the percentage share for each beneficiary, which in this case would be 10%, and each person would get that share of the estate. In this example, each grandchild would get $8,000.00 instead of $10,000.00.
Ademption is when you specifically gift an item that you no longer have. If you state in your will that your property 123 Anystreet is to be given to your best friend, and then sell that property the next year without leaving any new property to your friend, your friend will get nothing.
Having a will is important. As I’ve mentioned before, it’s just as important to keep it updated when life changes, or your assets do.