It's designed to ensure that family members maintain their standard of living and cover essential expenses before, or while, the deceased's Estate is being Administered. The urgency to get families funds is because it may take several months or years before their Assets are officially Distributed.
The amount offered varies by state, and may be determined as a percentage of the estate's value, up to a certain maximum amount. But in most cases, a family allowance takes priority over other claims against the estate; that is, it's paid before other Debts and taxes would normally be paid.
Family allowance differs from Preliminary Distribution, another legal mechanism to deliver Next of Kin and Heirs funds faster, in its purpose and timing. Family allowance provides immediate financial support during or before estate administration, whereas preliminary distribution occurs during the administration, and distributes some of the deceased's assets before the estate is fully settled.
The laws that govern family allowances and preliminary distributions vary by state, so it's best to speak with an Estate Attorney or Probate Attorney to understand their details and eligibility criteria required.
Other key points about a family allowance includes:
Recipients: The primary recipients of a family allowance are typically the surviving spouse and dependent family members, but eligible Beneficiaries may vary based on state law and the terms of the deceased's Last Will and Testament and Estate Plan.
Amount: The amount of the family allowance varies by state, but it is generally intended to cover reasonable living expenses. It may be set at a specific dollar amount or calculated as a percentage of the estate's value.
Timing: A family allowance is typically available immediately after the death of the Decedent, before the estate's debts have been paid and assets are distributed. This allows the surviving family members to receive financial support promptly.
Asset Priority: In many states, a family allowance is given priority over other claims and distributions from the estate. This ensures that family members receive necessary support even before the estate's debts and other distributions are Settled.
Duration: The duration for which the Family Allowance is provided can vary by state and circumstance. It may be available for a specific period or until the estate administration process is complete.
Administration: The Executor or Administrator of the estate is typically responsible for administering the family allowance. They ensure that the eligible family members receive the designated financial support in accordance with state probate law.