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According to Probate code section 3121, the child(ren) living with the decedent is entitled to claim the allowance. The $3,500 may come from either real property or personal property. If the value of the property exceeds $3,500, the child may purchase, from the estate, the additional property at fair market value, per code 3122. Please see section (b), specifically the requirement that this option be exercised within 6 months. Also, per 3122(c), if the appraised value of the property exceeds the allowance and the child does not exercise this option, then the property may be sold, with the allowance being set aside from the proceeds to be paid to the child. http://www.legis.state.pa.us/WU01/LI/LI/CT/PDF/20/20.PDF
As long as the estate is solvent, the PR has no discretion in regards XXXXX XXXXX of the allowance. Per code 3392, if the estate is insolvent, the costs of administration are paid first, then the allowance, then the debts of the estate.
There is no statutory provision for voiding the allowance based on conduct, unfortunately.
As for the other issues, an individual can be liable for undue influence. If an interested party (ie executor, personal rep) can prove that the individual used undue influence (similar to manipulation), a civil action can be brought to restore any monies gained by such tactics. So while the probate court would disburse the inheritance, a civil court judgment could result in the money being returned to the estate. These types of lawsuits are highly contentious and a personal attorney is strongly recommended.
I hope this provides you the information you need. As you can see, the allowance does not entitle the child to "carte blanche" as the allowance needs to come from either personal or real property.