A family allowance is an option for those who relied on a loved one’s income and do not have access to estate funds due to the probate process.
Every state has some form of family allowance, but the details vary widely.
Spouses and dependent children can always petition for the allowance; in some cases, others may be able to as well.
Probate court will determine the amount of the allowance based on state limits, the petitioner’s income and need, and the size of the estate.
Creditors and wills can complicate these determinations as well.
Losing someone you love can be a horribly disorienting experience. You might feel unsure of how to carry on—emotionally, but also on a practical level, especially if you relied on your loved one financially.
Money might not be the first thing on your mind these days, but, at some point you may have to confront the fact that your loved one’s income can no longer be a source of support for you and your family. It is important to know, therefore, about the financial options that probate courts provide to aid you during this extremely difficult time.
In many cases, probate and settlement of your loved one’s estate can take months, or even years, to complete. If you or other family members relied on your loved one financially, then you have the option of petitioning for a family allowance to support you while the estate is being settled. This allowance is a certain amount of funds that come out of the estate at the beginning of probate, and is meant to help support you during the time it takes to settle the estate in probate court.
All states have laws that provide for a family allowance, but the process and rules vary greatly from state to state, including the maximum available allowance, who can be eligible to receive it, and how it will be disbursed. In general, spouses and dependent children can petition for an allowance, and some states permit them to receive separate allowances. Depending on the state, others who relied on your loved one may also be able to receive an allowance, such as their parents.
Once you petition for the allowance according to the procedures set out in state law, the probate court will determine the amount of the allowance, based on factors including the state maximum, your own income, your need, and the value of your loved one’s estate. The courts have wide discretion with regard to allowances, and the decision can be complicated by creditors and non-dependent beneficiaries in the will, who may in some cases be able to request that the amount be reduced to avoid taking too much from the estate.
Even in cases where the allowance may render the estate insolvent, it will still usually be granted if the family has no other immediate means of support, although it may be reduced in this situation. In insolvent estates, the allowance generally has a high priority as an estate debt, after funeral costs and other administrative expenses. However, depending on the state and the situation, the courts may allow creditors to pursue family members who received allowances for repayment. In addition, if some of the allowance comes from money earned by the estate, distributions to family members can be taxed.
Family allowances generally continue until estate assets are distributed at the end of probate, although some states will stop the allowance after a set time like a year, even if probate continues beyond that point.
These matters can become quite complex, so it is advisable to speak to a lawyer in the state where your loved one lived in order to get a complete picture of your options for a family allowance and how they may affect your finances.
Although meant to be an option to support the family while probate takes its course, a family allowance can be a significant financial strain on the estate. Thus is is possible that petitioning the court for a family allowance might do more harm than good for your particular financial situation in the long run. Your attorney may therefore advise you to waive your right to this allowance in favor of another immediate option for income, in order to preserve the future prospects for the estate.
Financial matters can be a challenge to deal with when you’re still grieving, and may even seen irrelevant at such an emotionally intense moment. Remember, though, that your loved one would have wanted you to be supported during this difficult time, and a family allowance is an important way you can make sure you have what you need to get through it ●
Probate is often a long and complex process, but it is also completely manageable if you stay organized and follow the instructions of the court. It’s definitely still a good idea to avoid the full probate process, if you can. We’ll walk you through whichever scenario applies to your loved one’s estate.