One would need to have the entire will to give a definite opinion, but on the facts outlined, your understanding does appear correct. To put it simply, the residuary bequest gets hit for costs before the pecuniary legacies and\or bequests of specific items. However, the precise wording can be important, so get the advice of a solicitor and if needs be get him/her to get counsel's opinion (which will not be too dear, as there is only a single document to read)..