N.Y. Estates, Powers & Trusts Law § 13-1.3: Assets chargeable with payment of estate obligations; order in

§ 13-1.3 Assets chargeable with payment of estate obligations; order in

which assets appropriated; abatement

(a) All of the property of a decedent, and any income therefrom in the

course of estate administration, is chargeable with the payment of:

(1) Administration and reasonable funeral expenses, debts of the

decedent and any taxes for which the estate is liable.

(2) Unless such property is specifically disposed of, any general

dispositions.

(b) In applying such property to the payment of any item specified in

paragraph (a), no distinction shall be made between real and personal

property.

(c) Whenever such property is insufficient to satisfy both the estate

obligations described in subparagraph (a) (1) and all dispositions under

the will, interests in the decedent's estate abate, for the purpose of

paying such estate obligations, in the following order:

(1) Distributive shares in property not disposed of by will.

(2) Residuary dispositions.

(3) General dispositions. Demonstrative dispositions shall be treated

as general dispositions to the extent that the property or fund charged

with a demonstrative disposition has adeemed.

(4) Specific dispositions, and any income derived therefrom, ratably,

in accordance with the value of the respective interests of the

beneficiaries of such dispositions. For the purposes of this section, a

demonstrative disposition shall be treated as a specific disposition if

the property or fund charged with any demonstrative disposition has not

adeemed, to the extent of the value of such property or fund.

(5) Any disposition to a surviving spouse which qualifies for the

estate tax marital deduction.

(d) The order of abatement provided in paragraph (c) shall not apply

to the payment of an estate or other death tax, under the law of this

state or of any other jurisdiction, with respect to any property

required to be included in the gross tax estate of a decedent under the

provisions of any such law. The apportionment of such estate or other

death tax, and the abatement of interests in the decedent's estate

consequent to such apportionment, are governed by the provisions of

2-1.8.

(e) Whenever the provisions of this section are inconsistent with the

express or implied intention of the testator to distinguish real

property from personal property or to prefer certain beneficiaries under

his will to others, the property of the estate shall be applied and the

interests of beneficiaries under the will shall abate in such manner as

is necessary to give effect to the intention of the testator.

(f) In the event that any property of the estate is applied to the

payment of estate obligations in contravention of the order of abatement

prescribed by this section, beneficiaries whose rights have been so

impaired are entitled to be indemnified by other beneficiaries or

distributees, as the case may be, so as to accomplish an abatement in

accordance with the provisions of this section, and the amount of such

indemnity shall constitute a charge on the interests of the

beneficiaries or distributees liable therefor. Nothing in this paragraph

shall relieve the personal representative of his liability to

beneficiaries whose rights have been so impaired.