Florida Homestead Update
Presented by:
Randy C. Bryan, J.D., B.C.S.*
*Board Certified in Elder Law & Wills, Trust & Estates
The Law Offices of Hoyt & Bryan, LLC
254 Plaza Drive
Oviedo, Florida 32765
Ph: 407 977-8080
Fax: 407-977-8078
www.HoytBryan.com
What we won’t cover today
Jim Flick & I did a comprehensive homestead
presentation in which we addressed, among other
things,
what type of properties qualify as homestead (condo/
co-op/manufactured home/etc.);
ownership of homestead in a RLT for a single person;
ownership of homestead in a RLT for married couple;
impact of Bankruptcy Protection Act of 2005;
impact of Deficit Reduction Act of 2005
What we will cover
Three aspects of Homestead
New spousal option when receiving protected
homestead from deceased spouse
Effect of disclaimer of homestead
New option for inter vivos transfer to avoid
constitutional restriction on descent/devise when
married or survived by minor children
Impact of 98+ year lease on ad valorem exemption
in QPRT
Constitutional Provisions
 Article X, Section 4
There shall be exempt from forced sale under process of any court,
and no judgment, decree or execution shall be a lien thereon, except
for the payment of taxes and assessments thereon, obligations
contracted for the purchase, improvement or repair thereof, or
obligations contracted for house, field or other labor performed on
the realty, the following property owned by a natural person:
Constitutional Provisions
 Article X, Section 4
a homestead, if located outside a municipality, to the extent of one
hundred sixty acres of contiguous land and improvements thereon,
which shall not be reduced without the owner's consent by reason of
subsequent inclusion in a municipality;
or if located within a municipality, to the extent of one-half acre of
contiguous land, upon which the exemption shall be limited to the
residence of the owner or his family;
Constitutional Provisions
 Article X, Section 4
During Lifetime:
“The owner of homestead real estate, joined by the spouse if
married, may alienate the homestead by mortgage, sale or gift
and, if married, may by deed transfer the title to an estate by the
entirety with the spouse.”
Constitutional Provisions
 Article X, Section 4
After Death:
“These exemptions shall inure to the surviving spouse or heirs”
“The homestead shall not be subject to devise if the owner is
survived by spouse or minor child, except the homestead may
be devised to the owner's spouse if there be no minor child.”
Restrictions on Devise
Survived by spouse or minor child – no change to . . .
 732.201(33) – “protected” homestead
 732.4015 – statutory restrictions on devise
Descent of Homestead
 Section 731.201(33)
“Protected homestead” means the property described in s. 4(a)(1),
Art. X of the State Constitution on which at the death of the
owner the exemption inures to the owner’s surviving spouse or
heirs under s. 4(b), Art. X of the State Constitution.
For purposes of the probate code, real property owned as tenants
by the entirety is not protected homestead.
Descent of Homestead
 Section 732.4015
(1) As provided by the Florida Constitution, the homestead shall
not be subject to devise if the owner is survived by a spouse or
minor child, except that the homestead may be devised to the
owner's spouse if there is no minor child.
(2) For the purposes of subsection (1), the term:
(a) "Owner" includes the grantor of a trust described in s.
733.707(3) that is evidenced by a written instrument which is in
existence at the time of the grantor’s death as if the interest held
in trust was owned by the grantor.
(b) "Devise" includes a disposition by trust of that portion of the
trust estate which, if titled in the name of the grantor of the trust,
would be the grantor’s homestead.
Descent of Homestead
Consequence of ineffective devise
 No change to 732.401(1) . . . .
“If not devised as permitted by law and the Florida Constitution,
the homestead shall descend in the same manner as other intestate
property; but if the decedent is survived by a spouse and lineal
descendants, the surviving spouse shall take a life estate in the
homestead, with a vested remainder to the lineal descendants in
being at the time of the decedent's death per stirpes.”
Descent of Homestead
Consequence of ineffective devise
 Created burden on life tenant & remaindermen
 Especially challenging where surviving spouse is not the
parent of decedents children – creates an unintentional
partnership between people who may not get along
 Allocation of expenses:
 LE – interest/property taxes/insurance/ordinary repairs
REM – principal/extraordinary repairs
 Partition not available because remaindermen do not have a
current possessory interest
 Even if all parties agree to sale, may not like valuation
between life tenant and remaindermen
Descent of Homestead
 New (2) added to 731.401 to address problem:
In lieu of a life estate under subsection (1), the surviving
spouse may elect to take an undivided one-half interest
in the homestead as a tenant in common, with the
remaining undivided one-half interest vesting in the
decedent’s descendants in being at the time of the
decedent’s death, per stirpes.
Descent of Homestead
 Process for TIC election:
 Right of election exercised by
Surviving Spouse
Agent under POA or Guardian – both require court approval
 Timing of election
Must be made within 6 months after decedent’s death AND
during surviving spouse’s lifetime
No extension permitted except where court approval is
required, the time for making election is tolled until 30 days
after court decision or 6 months from death, whichever is
longer
 Election is irrevocable
 Statutory form in 732.401
Descent of Homestead
Allocation of expenses under new law:
 Until election is made, traditional allocation of
expenses between life tenant and remaindermen
From date of election forward – expenses are allocated
based on proportional ownership interest
Descent of Homestead
Issues to keep in mind with TIC election:
 Still have issue if decedent didn’t want homestead to
pass to all of his descendents or per stirpes
 Time for making TIC election different than elective
share
TIC election does not apply to property owned as TBE
or as JTWROS
 Interest in Protected Homestead in addition to elective
share
 30% of elective estate PLUS interest in protected homestead
Any owner can force partition
Descent/Devise Hypo #1
Patrick and Thelma are in their second marriage and each have
children from their prior marriages, but none are minors. They
did not sign a marital agreement. They live in the home Patrick
owned before their marriage, which is titled in his RLT. The
terms of the trust provide that if Thelma survives she receives all
the income, with discretionary encroachment into principal by an
independent trustee. At Thelma’s death, the property is to be
distributed to two of Patrick’s three children and one of Thelma’s
children. Patrick dies.
Does the homestead stay in trust?
Does Thelma’s child receive any interest?
What if Thelma disclaims?
Descent of Homestead & Disclaimer
 New Section added to 732.4015
(3) If an interest in homestead has been devised
to the surviving spouse as authorized by law and
the constitution, and the surviving spouse’s interest
is disclaimed, the disclaimed interest shall pass in
accordance with chapter 739.
Descent of Homestead & Disclaimer
 Effect of new 732.4015(3)
If homestead descends in any manner that would vest a
life estate in spouse & remainder in decedents
descendants, a disclaimer by surviving spouse merely
accelerates remainder interest and does not change.
If homestead was properly devised, a disclaimer by
surviving spouse allows the property to pass to
contingent beneficiaries named in decedent’s planning
Descent/Devise Hypo #2
Patrick and Thelma are in their second marriage and each have
children from their prior marriages, but none are minors. They
live in the home Patrick owned before their marriage, which is
titled in his RLT. The terms of the trust provide that the
homestead is to be distributed outright to Thelma, but if she
predeceases or disclaims, the property is to be distributed to two
of Patrick’s three children and one of Thelma’s children.
Patrick dies and Thelma timely disclaims.
Who receives the home?
Descent/Devise Hypo #3
John & Elaine are each in a second marriage, but have
owned their home as TBE for a number of years. They
each of children from their prior marriages – both of
Elaine’s children are minors and one of John’s children
is a minor. John & Elaine want their homestead
property to pass to all 4 children equally at the 2nd of
their deaths.
Can they?
Intervivos Transfer of Homestead to Avoid
Constitutional Restraint on Alienation
FL constitution and 732.4015 prohibit devise of
homestead if survived by spouse or minor child
Nothing, however, prohibits the inter vivos
conveyance of an interest in homestead if single or
when married if joined by spouse
 If properly conveyed during lifetime WITHOUT
retention of ENTIRE beneficial estate, the property is
not “owned” for purposes of descent & devise
Intervivos Transfer of Homestead to Avoid
Constitutional Restraint on Alienation
New 732.4017 – Inter vivos transfer of homestead
(1) permits transfer to one or more persons
(2) permits transfer to trust
Both require transferor to NOT retain a power, in
any capacity, acting along or in conjunction with
another, to revoke or revest the interest in the
transferor.
Intervivos Transfer of Homestead to Avoid
Constitutional Restraint on Alienation
Transferor can retain separate legal/equitable
interest such as term of years, life estate, reversion,
possibility of reverter or fractional fee interest
Transferor can condition transferees possessory
interest until a date certain or upon a specified
event, including the death of the transferor
Transferor can make transfer subject to divestment,
expiration or lapse upon a date certain or upon a
specified event
Intervivos Transfer of Homestead to Avoid
Constitutional Restraint on Alienation
If transferred to a trust, transferor can retain power
to alter beneficial use/enjoyment within a class of
beneficiaries identified in the trust other than the
transferor, his creditors, his estate or creditors of his
estate.
Intervivos Transfer of Homestead to Avoid
Constitutional Restraint on Alienation
Examples of qualifying inter vivos transfers that are
not subject to constitutional restrictions on devise
(whether or not survived by spouse/minor child)
 inter vivos transfer to QPRT
 inter vivos transfer of remainder interest in homestead to
an individual(s) following life estate retained by owner
 inter vivos transfer of remainder interest in homestead
that is subject to complete divestment if owner of
homestead survives to a predetermined date specified in
the deed, or if conveyance to trust, to a date specific in
the trust instrument.
Intervivos Transfer of Homestead to Avoid
Constitutional Restraint on Alienation
Create Irrevocable Trust f/b/o minor children
Transfer remainder interest in homestead to
irrevocable trust, retaining a life estate in Mom/Dad
Mom/Dad retain lifetime LPOA over trust with
authority to change beneficial interest
Trust provides that homestead reverts back to
Mom/Dad or survivor when youngest child reaches
age of 18
Intervivos Transfer of Homestead to Avoid
Constitutional Restraint on Alienation
Questions if using this technique
What if you want to refinance home?
What if you want to sell home before youngest child is
18?
Recent Cases
 Grisolia v. Pfeffer, --- So.3d ----, 2011 WL 5864806 (Fla. 3d DCA
Nov 23, 2011) – although foreign national did not qualify for
homestead property tax exemption, he may still qualify for
homestead creditor protection at death
 Marger v. De Rosa, --- So.3d ----, 2011 WL 252942 (Fla. 2d DCA
January 28, 2011) – homestead rights evaporate at death if
property was owned as JTWROS
 Habeeb v. Linder, --- So.3d ----, 2011 WL 613392 (Fla. 3d DCA
Feb 09, 2011, opinion withdrawn) – can husband/wife waive
homestead rights merely by signing deed?
Homestead in QPRT
During QPRT term, homestead property tax exemption remains in tact
because of right of occupancy
 At end of QPRT term, can Trustmaker execute long-term lease continue
ad valorem exemptions without reassessment?
 196.041 - lessees owning the leasehold interest in a bona fide lease having an original
term of 98 years or more in a residential parcel . . ., shall be deemed to have legal or
beneficial and equitable title to said property.
 Amendment to 193.155(3) by adding (3)(a)(1)(b)
There is no change of ownership if:
1. Subsequent to the change or transfer, the same person is entitled to
the homestead exemption as was previously entitled and:
b. The transfer is between legal and equitable title or equitable
and equitable title and no additional person applies for a
homestead exemption on the property.
Florida Homestead Update
Presented by:
Randy C. Bryan, J.D., B.C.S.*
*Board Certified in Elder Law & Wills, Trust & Estates
The Law Offices of Hoyt & Bryan, LLC
254 Plaza Drive
Oviedo, Florida 32765
Ph: 407 977-8080
Fax: 407-977-8078
www.HoytBryan.com