Oregon Revised Statutes Protective Proceedings; Powers of Attorney; Trusts § 130.237

(1) As used in this section, “abate” or “abatement” means to reduce or the reduction of a gift from a trust at the settlor's death on account of the insufficiency of the trust property to pay all claims and expenses and distribute all gifts in full.

(2) If the trust instrument expresses an order of abatement, or if the plan of distribution or the express or implied purpose of the distribution from the trust would be defeated by the order of abatement stated in subsection (3) of this section, the shares of the distributees abate as may be found necessary to give effect to the intention of the settlor.

(3) Except as provided in ORS 130.555 as to the shares of pretermitted children, and in ORS 114.600 to 114.725 relating to the elective share of the surviving spouse, shares of distributees abate without any preference or priority as between real and personal property in the following order:

(4) A general gift charged on any specific property or fund is considered, for purposes of abatement, to be property specifically given to the extent of the value of the property or fund on which the general gift is charged. Upon the failure or insufficiency of the property or fund on which the general gift is charged, the gift is considered a general gift to the extent of the failure or insufficiency.

(5) Abatement within each classification is in proportion to the amounts of property each of the distributees would have received had full distribution of the property been made in accordance with the terms of the trust instrument.

(6) Persons to whom the trust instrument gives tangible personal property not used in trade, agriculture or other business are not required to contribute from that property unless the property forms a substantial amount of the total estate and the court specifically orders contribution because of the gift.

(7) When the subject matter of a preferred gift is sold or used incident to administration, abatement shall be achieved by appropriate adjustments in, or contribution from, other interests in the remaining assets.