What is the ruling on disposing of the funds from the plot of land that the grandfather bequeathed for spending on his grave, reciting the Quran, and coffee, and is it permissible for those who owe debts to take from it to pay off their debts?

What your grandfather enjoined is considered a void will due to the innovations it contained, such as: gathering at the grave and celebrating it, serving food there, reciting the Qur’an on specific occasions, and paying a wage for that. All of this is either from the category of prohibited wailing, or blameworthy boasting, or wasting money in unlawful ways. Therefore, there is no blame on the heirs if they dispose of their money rightfully and prevent what is void.