Florida Homestead and its Hidden Traps

Florida Homestead and its Hidden Traps

Most Floridians and law practitioners are aware of the many benefits afforded to those who declare their Florida residences as their “Homestead.”  Real estate taxes are reduced and future escalation in real estate tax valuations are minimized.  General creditors cannot levy upon the homestead and force its sale.  And at death, heirs who inherit the homestead can do so free of the claims filed in the decedent’s death.  While these benefits are providential, there remain the often unknown problems that can arise when the homestead decedent attempts to deal with the property either during life or at death.

As a general rule, a person can sell, lease, or mortgage real property without consent by one’s spouse.  However, when the property is homestead, such property cannot be sold, leased, or mortgaged by the owner without joinder of the spouse. Consequently, unwary persons have found that their deeds are ineffective.  Even in cases in which the transfer to a grantor’s trust is joined in by the spouse, if the conveyance is such as to leave homestead interest back in the grantor, the conveyance will be ineffective against the spouse in a future deed from the trustee.

Additionally, homestead property cannot be devised in accordance with the general laws that govern Wills and Trusts.  Florida law provides that if a decedent is survived by a spouse or minor child then certain restrictions apply.  If decedent is survived by a spouse and adult children then the decedent can ONLY leave the spouse the entire interest owned by the decedent. Any effort to leave the property to other parties or to restrict the gift to spouse to a life estate or other gift less than full ownership is very problematic.  If the attempted gift of the homestead fails to comply with Florida statutes, then the spouse will have the option of electing to have either 1) a life estate or 2) one-half of the decedent’s homestead. These results may frustrate the intent of the client.

To immediately avoid the above stated problems Floridians often take title in joint names so that the survivor takes the property upon the death of the first spouse to die.  Again, however, that may not be the desire of the client, especially, if there are children of prior marriages, or there are other considerations that make that result undesirable. Florida real property and estate planning practitioners have tools to use to offset these law-driven results. 

Floridians, and those intending to move their residence to Florida, are well advised to seek advice from an attorney trained in the areas of real estate and estate planning, so as to determine the proper plan to follow that will accomplish their desires, and then to select the best method that does not violate the Florida laws affecting homestead.

This article was written by James. E Willis together with his law partner Christina Davidow, local attorney and Vineyards resident. Their website is www.willisdavidow.com. Willis & Davidow, Attorneys at Law, LLC 851 5th Ave. N., Suite 301 Naples, Florida 34102 Tel. (239) 465-0531 Fax (888) 435-0911 cdavidow@willisdavidow.com  www.willisdavidow.com