Genome-wide association studies have been able to identify disease associations with many common variants; however most of the estimated genetic contribution explained by these variants appears to be very modest. Rare variants are thought to have larger effect sizes compared to common SNPs but effects of rare variants cannot be tested in the GWAS setting. Here we propose a novel method to test for association of rare variants obtained by sequencing in family-based samples by collapsing the standard family-based association test (FBAT) statistic over a region of interest. We also propose a suitable weighting scheme so that low frequency SNPs that may be enriched in functional variants can be upweighted compared to common variants. Using simulations we show that the family-based methods perform at par with the population-based methods under no population stratification. By construction, family-based tests are completely robust to population stratification; we show that our proposed methods remain valid even when population stratification is present.