Yes, the Identity Toolkit will automatically merge accounts based on email address. In some cases, the Identity Toolkit will need to ask the user for their previous credentials before performing the merge. For example, if a user has previously signed up with an email / password and then signed up with Facebook, they will be asked to enter the password for the last time.
Identity Toolkit will also help you send reset passwords. Here is the documentation to enable this feature and implemented in this sample .
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