58Application of income of settled residuary estate

58 Application of income of settled residuary estate (1) Where a deceased person leaves a will containing a residuary gift by virtue of which real or personal property is settled by way of succession, this section applies to and in relation to the income derived from that property. (2) The income to which this section applies is not applicable in payment of: (a) the funeral, testamentary or administrative expenses payable from the estate of the person; (b) the debts or liabilities of the person; (c) any interest that accrued on any such debts or liabilities before the death of the person; or (d) any legacies bequeathed by the will of the person. (3) The income to which this section applies is applicable in payment of the interest (if any) that accrues: (a) on the funeral, testamentary or administrative expenses payable from the estate of the person; (b) after the death of the person, on the debts or liabilities of the person; or (c) on any legacies bequeathed by the will of the person, before payment, and the income is so applicable in priority to any other assets in the estate of the person. (4) Subject to subsection (3), the income to which this section applies is payable to the person for the time being entitled to the income from the settled property. (5) Where, in the final adjustment of the estate of a deceased person among the persons entitled to share in the distribution of the estate: (a) property (other than property referred to in subsection (1)) is treated as if it had been used in the proper order in payment of the funeral, testamentary and administrative expenses, or of the debts and the liabilities of the estate, or of any legacies bequeathed by the will of the deceased person although it was not in fact so used; and Administration and Probate Act 1969 20 (b) income was earned by that property after the death of the person but before the property was so used or was deemed to have been so used, that income shall, for the purposes of this section, be deemed to be income to which this section applies. (6) This section: (a) does not affect the rights of a creditor of the estate; and (b) applies, subject to the provisions of the will of the deceased person and of any law in force in the Territory, with respect to charges on the property of a deceased person.