Yes, the residuary estate can be used to cover debts and taxes of the deceased person’s estate. When a person passes away, their estate includes not only assets but also any outstanding debts and tax obligations.
The residuary estate consists of the remaining assets and property after specific bequests and distributions have been made. It encompasses all assets that were not specifically allocated or accounted for in the Will. As such, the residuary estate can be used to settle any outstanding debts, loans, or liabilities of the deceased.
Additionally, the residuary estate can also be used to satisfy any tax obligations such as income tax. Before the distribution of the residuary estate to the residuary beneficiaries, it is generally prudent to ensure that all applicable taxes have been paid or adequately provided for.
Settling debts and taxes is an important aspect of estate administration, and it is the responsibility of the executor or trustee to manage these matters. They are obligated to use the assets of the estate, including the residuary estate, to satisfy these obligations before distributing the remaining assets to the beneficiaries.