A family allowance can be a serious drain on the assets of a decedent's estate. As such, one may want to consider options to soften its potential blow. It's important to note that family allowances are not a major issue for most clients. Some situations more than others may call for considering one of the following options to limit his or her family members' ability to request a family allowance.

Waiving a family allowance

Under California Probate Code Section 141(a)(5), a surviving spouse may waive his or her right to a family allowance. The waiver must be in writing, and the surviving spouse must do so voluntarily and have knowledge of the relevant facts. The precise form of a waiver is beyond the scope of this post; however, more specifics are laid out in California Probate Code Sections 140-147.

Another strategy is to force the surviving spouse or other family members to decide between a gift left to them in the deceased spouse's Will or to request that a court grant a family allowance. Prior to death, the deceased spouse would include provisions in his Will which would cause the beneficiary to forfeit their gift if  a family allowance is requested.

If the gift is substantial, and there's a risk that a judge may deny or only grant a small family allowance, the family members may think twice before requesting a family allowance. There's no statutory support for this approach, and to date, this technique does not appear to be tested in a court of law; however, it may be a worthwhile strategy to consider in situations where a waiver is not possible.

The impact of a family allowance cannot be underestimated, and for certain clients, it is imperative to think through how it might affect their estate plan.

During the probate of an estate, certain family members of the deceased person may request an allowance to be paid from the estate for their maintenance. California Probate Code Section 6540 states that:

(a) The following are entitled to such reasonable family allowance out of the estate as is necessary for their maintenance according to their circumstances during administration of the estate:

(1) The surviving spouse of the decedent.

(2) Minor children of the decedent.

(3) Adult children of the decedent who are physically or mentally incapacitated from earning a living and were actually dependent in whole or in part upon the decedent for support.

(b) The following may be given such reasonable family allowance out of the estate as the court in its discretion determines is necessary for their maintenance according to their circumstances during administration of the estate:

(1) Other adult children of the decedent who were actually dependent in whole or in part upon the decedent for support.

(2) A parent of the decedent who was actually dependent in whole or in part upon the decedent for support.

(c) If a person otherwise eligible for family allowance has a reasonable maintenance from other sources and there are one or more other persons entitled to a family allowance, the family allowance shall be granted only to those who do not have a reasonable maintenance from other sources.

In other words, this statute covers people who primarily relied on the deceased person for support. It also limits the ability of those who already have a reasonable amount of resources from requesting an allowance.

Family allowances are problematic because of the significant amount of time it takes to go through the probate process in California. Often, probate administration lasts a year or more. Thus, for example, if a decedent named non-family members as beneficiaries of his or her Will, it's possible that the family allowance would eat away at the named beneficiaries' inheritance.

Some counties limit the amount of time that a family allowance will last, but California Probate Code Section 6543 states that:

(a) A family allowance shall terminate no later than the entry of the order for final distribution of the estate or, if the estate is insolvent, no later than one year after the granting of letters.

(b) Subject to subdivision (a), a family allowance shall continue until modified or terminated by the court or until such time as the court may provide in its order. 

In other words, the family allowance may continue until (1) the judge issues the final order distributing the assets of your estate, or (2) if the liabilities of the estate exceed its assets, no later than one year after "Letters" (the document officially appointing your Executor or Administrator) is granted.

It's therefore important to talk with an estate planning lawyer to determine whether a family allowance poses a significant risk in your particular case.

Probate is the process by which the Court oversees the administration of your estate, including the payment of any debts and the transfer of your assets to your beneficiaries or heirs. What some people don't know, however, is that there are a number of statutes within the California Probate Code that are intended to protect your family (e.g., surviving spouse and your descendants).

While this is typically a positive benefit for your family, it may not be what you intended, for example, if you had others beyond your family that you wanted to care for and who you wanted to have as the beneficiaries of your estate. Under the law, your family's needs may have priority over your other beneficiaries, which may ultimately affect your estate plan.

Here are some of the family protections available:

1. Family Allowance - An allowance that is provided to your family during the probate administration period, which would utilize the estate assets.
2. Probate Homestead - May allow your family to continue using your home after your death, which would prevent other beneficiaries from receiving the home.
3. Small Estate Set Aside - A court may allow estates that are worth $20,000 or less to be set aside for the benefit of a surviving spouse or minor children to the exclusion of the beneficiaries named in a Will.

Understanding the impact of the provisions in your estate plan is vital in ensuring that you and your family have a plan that is predictable and that your wishes are ultimately carried out.