Originally from ticket #12241.
After you click edit the primary contact info on the family page, you will see the status of their account.
If it is "No" you can edit it and give them an email, password and hint.
If it is "Yes" the account is fully active. You can reset it using the "Change Password" button, and it will then show "Yes (Account initialized)"
If it is "Yes (Account initialized)" the family will be prompted for a new password when they login.
Active accounts can also be disabled and enabled using the respective buttons.