A person's estate cannot distribute more than what one owns at death. This is the rough testamentary equivalent of the phrase "don't write a check that you cannot cash." If a person's will devises too much, a process known as abatement occurs. In short, abatement is "the reduction of testamentary gifts." Black's Law Dictionary 8th ed. (West Group, 2004).
For example, assume that in 1999 Thomas wrote a will which devised (a) a gift of $50,000 to his brother Bernardo, (b) $75,000 to his friend Fred and (c) the rest, known as the residue, to his neighbor Ned. When Thomas wrote his will, his estate consisted of $300,000 in a bank account and an unencumbered home in Los Altos, CA. However, economic difficulty soon confronted Thomas. He repeatedly invested in many failed start-ups in Silicon Valley. By the time Thomas passed away in 2013, his estate consisted of only a $60,000 bank account which lacked a pay-on-death beneficiary. His Los Altos home had been earlier foreclosed on. Thus, Thomas's estate clearly lacked the necessary liquidity to fullly satisfy the gifts he made in his will.
(1) Property not disposed of by the instrument.
(2) Residuary gifts.
(3) General gifts to persons other than the transferor’s relatives.
(4) General gifts to the transferor’s relatives.
(5) Specific gifts to persons other than the transferor’s
(6) Specific gifts to the transferor’s relatives.
From the above example, (a) is considered a specific gift to a relative so it would be (6), (b) is considered a specific gift to a non-relative so it would be (5) and (c) is considered a residual gift so it would be (2). Hence, the residual beneficiary, Ned, would receive nothing as there would be no items left following the distribution of the specific gifts. For Fred, since he lacked priority in regards to Bernardo as he was a non-relative, his gift would be abated in favor of Bernardo. Whereas the estate consisted of $60,000, the first $50,000 of which would be allocated to satisfy the bequest to Bernardo. The remaining $10,000 would be allocated to Fred.