So we were not created out of nothing. Augustine was of the opinion that we were, as was the whole Universe created from nothingness. By a God without body, parts or passions, whereas our core teaching is, that our Father created this by the power of his Word (his Son) by Organizing unorganized matter to form the right conditions for life.
We know very little about pre-mortality, just that we all — all human beings — were there, when Jesus was chosen in the beginning to be our Savior. We decided, were anxious, to have the experience of mortality. That much is from the Scriptures. We knew it would be tough, and risky, but remaining forever in a place without possibility of advancement, when we had our Father as an example of what kinds of changes could happen to us, if we kept our second estate.
From this on, the record gets a little murky, since we have some folkloric teachings that seek to elaborate on the details, but it appears that Joseph Smith taught there was, after Lucifer’s offer of domination was rejected, a war. This is when the Dragon of the Revelation/Apocalypse brought down a third of the stars of Heaven. Those, who sided with Lucifer would not be having the advantages of physical bodies. They were “cast down” (it is unclear whether this is an expression of John’s acculturation or strictly revelatory with the meaning that they were cast down on the Earth, but I suspect the latter is a viable alternative) from the Father’s presence, and their future is to be together with <em>their kind</em> of Savior, if Lucifer could be called that by any stretch.
The sum of this is, that all humans, who ever have been or will be on Earth, have “kept their first estate” and were on the side of righteousness with Michael, who fought the “Dragon.” And we on the Earth are in our second estate, which was defined in Abraham 3:25.
Again, what this means is, that none of us have earned a “lesser” portion. What could be true though, is that we are given opportunities that <em>match our needs</em>. Remember that of those who are given much, much will be required. And if I could go into it, I could show how children sometimes thrive with incredible odds against them, and at the same time others wither with everything at their fingertips.
I will be attaching a longish list of references to the last part.