What is the term for the proportional reduction of a legacy when the funds are insufficient to pay it in full?

The term for the proportional reduction of a legacy when the funds available in an estate are insufficient to pay it in full is known as abatement. This legal principle applies in situations where an estate cannot satisfy all claims against it, including debts and legacies (gifts made in a will). When this happens, the amounts of the legacies are reduced proportionally based on their value or the amount of the estate available for distribution.

For example, if a testator has allocated specific monetary gifts to multiple beneficiaries but their estate has incurred debts that exceed its total value, abatement comes into play to ensure that all beneficiaries receive a fair and proportionate share of the remaining estate assets. This ensures that no single beneficiary is disproportionately impacted by the estate's financial shortcomings.

Other terms may refer to reductions in different contexts, but they do not specifically address the scenario involving proportional reductions of legacies due to insufficient funds in an estate.