There is nothing wrong, as far as Islam is concerned, in giving Zakah to relatives as long as the person receiving this is financially straitened. Dr. Muzzamil Siddiqi, former president of the Islamic Society of North America, states: It is permissible to give Zakah to the needy relatives. The relatives to whom Zakah cannot be given are wife, children, grandchildren, parents and grandparents. It is one’s duty to take care of them first and then if there is any money left and it reached the nisab of Zakah, then one should give Zakah on that amount.
Thus, all non-dependant relatives such as brothers, sisters, uncles, aunts, nephews, nieces, etc., can receive the Zakah if they are poor and need help. The person who gives the Zakah must make an intention that the amount he/she is giving is for the purpose of Zakah. The recipient does not have to be informed about it. It is better to give charity to an individual in a respectful manner without hurting his/her dignity. Allah says in the Qur’an: (If you disclose your charity, it is well, but if you conceal it and make it reach to those who are in need that is best for you. It will remove from you some of your sins and Allah is well-acquainted with what you do.) (Al-Baqarah 2: 271)
Sheikh Muhammad Saleh Al-Munajjid, adds: There is nothing wrong with a man or woman giving their Zakah to a poor brother, sister, paternal uncle, paternal aunt or to any poor relative, because of the general meaning of the evidence. Indeed, giving Zakah to them is both an act of charity and maintaining family ties, because the Prophet (peace and blessings be upon him) is reported to have said: “Charity given to the poor is charity and charity given to a relative is charity and maintaining of family ties.” (Reported by Imam Ahmad and An-Nasa’i). Excluded from this are parents and those in the ascending order of parenthood, and children – male or female – and those in the descending order of posterity; Zakah should not be given to them even if they are poor; rather one is obliged to spend on them from one’s own wealth, if one is able and if there is no one else who can spend on them.