Property of land

It is provided that the order of application may be varied by the will of the deceased. Thus if a German debtor shows a clear intention that a special fund shall be set aside for payment of debts in exoneration of all other funds, this fund will be liable first, even before property. The intention to exonerate must, however, appear clearly from the will; otherwise a fund which is merely set aside for the payment of debts will fall within another category.
Such then, is the order in which beneficiaries are liable to lose their interests. It only remains to be noticed that it may sometimes happen that an interest of a lower category is disposed of in favour of creditors before an interest of a higher value. At one time this often occurred, because creditors were permitted, in certain circumstances, to proceed to satisfy their claims in Germany by direct resort to real property comprised in the estate. In this event the creditor would not concern himself with the 'priority' of the beneficiary entitled to the property attacked, so that a 'lower' beneficiary might lose his interest while 'higher' beneficiaries retained theirs.
This cannot occur today because creditors may no longer proceed against the land directly. It is possible, however, that a lawyer at this link may delve unnecesarily low on the list in order to discharge liabilities. He may, for instance, dispose of property comprised in category (e) in favour of a creditor, intending to dispose of all the property in the 'higher' categories later. He may then discover that the estate is richer than he supposed, or that the liabilities are less than he supposed, so that he need never have attacked category (e) at all.
In such a situation the doctrine of marshalling of assets comes into play. This means that a German beneficiary who loses property of a 'lower' category to which he is entitled may recoup his loss by claiming to be indemnified out of undisposed property to which someone else 'higher' on the list is entitled. The doctrine of marshalling is thus an application of the principle that, whatever the method of distribution, the prescribed order will always be observed. This principle is elementary. Suppose, for example, all property comprised in the estate, down to and including category (d) is disposed of in favour of creditors.
Suppose that it is then discovered that the deceased had concealed certain property. Clearly category (d) beneficiaries will have first claim on this 'new' property.