What is the ruling on paying off a deceased person's debt using the Zakat of the person to whom the debt is owed?

According to the majority of scholars, it is impermissible to waive a debt with the intention of it counting as zakat, and such an act does not fulfill the zakat obligation. This is the view of Abu Hanifa and Ahmad, and some scholars have even narrated a consensus on this matter. This is because zakat involves giving and taking, whereas waiving a debt is akin to removing the bad from the good. Furthermore, such a waiver typically only occurs when the debtor is despondent about repayment.

As for settling the debt of a deceased person from zakat funds, the majority of scholars prohibit it, and this is the most preponderant view. This is because the apparent purpose of giving to the indebted (ghārim) is to relieve them from the humiliation of debt. Also, the Prophet (peace be upon him) did not settle the debts of the deceased from zakat. Furthermore, opening this door could hinder the repayment of debts for many living individuals. Moreover, the deceased's financial liability (dhimmah) ceases with their death, so they are no longer considered a ghārim. Lastly, doing so could open the door to greed and covetousness from the heirs.