Homestead – A Legal Chameleon

Homestead – A Legal Chameleon

Clients often raise questions about homestead law. This is hardly surprising. Homestead is very confusing. In a 2007 case, homestead law was described as “the leading cause of cerebral herniation” and a “legal chameleon.”

Homestead law is actually a series of laws, covering different characteristics of a person’s homestead. One characteristic of homestead property is that it is taxed at a lower rate than non-homestead property. You notice this each year when you get your property tax bill. Another legal characteristic of homestead is that it carries certain protections against creditors. A third set of laws restricts how a person can transfer homestead, either by deed during life, or through a bequest at death.

This third area, the legal restrictions on transfer, is the area about which I receive most questions. The general legal restrictions are discussed below. However, this is not an exhaustive discussion. If you need to discuss homestead transfer restrictions applicable to your specific facts, please speak with me or another estate planning attorney.

Transfers during life: If a person is married, his/her spouse must join in the lifetime transfer or mortgage of homestead property. This is true even if the homestead is owned by one spouse alone. Mistakes about this are very common. An example: “Bob,” a single man, owned and lived in his house (homestead property) for years as the sole owner. He then married “Betty,” and decided to buy a bigger house. Even though Betty has never been an owner of this homestead property, she must sign the deed that transfers this homestead property to the new owners. This is because Betty, now Bob’s wife, has a legal interest in Bob’s homestead.

Transfers at death: This is probably the most confusing area of homestead law. There are many legal restrictions about how you can devise your homestead. Some of the rules about “devisable” homestead are listed below. (If a homestead is owned jointly in tenants by the entireties, or in joint tenancy with rights of survivorship, it is not “devisable,” because these types of ownership carry with them automatic survivorship rights in the joint owner.)

The rules:

  • Single persons with minor children may not devise homestead.
  • Single persons with adult children may freely devise homestead.
  • Single persons with no children may freely devise homestead.
  • Married persons with minor children may not devise homestead.
  • Married persons with no children may only devise homestead to the surviving spouse.
  • Married persons with adult children may only devise homestead to the surviving spouse

The spouse, of course can waive the right to inherit the homestead through a legal agreement, such as a pre-nuptial or a post-nuptial agreement. In such a case, a married person without minor children could freely devise homestead.

If the homestead is devised improperly, then under Florida law, the devise will be considered void, and the laws of intestacy will govern how the homestead is inherited. If the deceased had both a surviving spouse and adult descendants, the spouse will inherit a life estate, with the remainder interest passing to the descendants.

A relatively recent amendment to the homestead laws allows a surviving spouse that is left with a life estate under the law to choose a different result. The surviving spouse now has the option to take a 50% tenant in common interest in the property instead of a life estate. This option allows the surviving spouse to share the maintenance costs of the homestead with the descendants, and also allows the surviving spouse the option of forcing a sale of the property through a judicial partition action. The Florida statutes describe the specific method by which a surviving spouse must exercise this option.

In future posts, I will discuss some of the other aspects of homestead law, hopefully making this legal chameleon a little easier to “see.”

Sheryl J. Manning, PL.
1104 Ponce de Leon Blvd
Coral Gables, Fl 33134
(786) 804-3456 Direct Line
(305) 445-3721 Receptionist

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