Question: I know that homestead property in Florida is given special treatment, but I understand this year’s Legislature made some changes. Please explain those homestead laws.
Answer: Homestead property in Florida is a person’s primary residence. Florida law provides substantial protection for homestead from creditor claims and even places restrictions on conveyance or transfer of homestead property which extend beyond death of the owner. These protections and restrictions are intended to insure that housing is maintained for an owner and his family, even in the face of financial problems.
Article X, Section 4 of Florida’s Constitution provides homestead exemption from forced sale and judgment liens, except for the payment of taxes and assessments and obligations contracted for the purchase improvement, repair or labor performed on the property. The maximum size of homestead in a city is ½ acre and outside of city limits the maximum size is 160 acres. In addition to protection for real property, personal property is protected to the value of $1,000.00.
The Constitutional protections are not limited to the owner. They also pass to the surviving spouse and heirs of the owner. That means one’s creditors cannot do after death what they could not do during life. The homestead is also insulated from the creditors of a surviving spouse or heirs.
The Constitution also limits the right of an owner to transfer property at death. If the owner is survived by a spouse or minor child, the property may not be devised, except homestead may be devised to the owner’s spouse if there are no minor children. The owner of homestead may sell and convey the property during his or her lifetime or mortgage it, provided the owner is joined by the owner’s spouse if married.
Article VII of Florida’s Constitution provides tax relief, in the form of what has been known as the “Save Our Homes” Amendment. The Amendment places a 3% cap on increase in assessed value of homestead property each year. The Legislature has passed a number of statutory provisions implementing the Save Our
Until the 2010 Legislature weighed in, Florida’s statutes confirmed that homestead property could not be devised if the owner was survived by spouse and minor children. If no minor children, the property could be devised to a surviving spouse. Any unauthorized devise or attempt to devise was rendered anulity, with the homestead descending in the same manner as intestate property. That means, the homestead passed as if the owner did not leave a will and in accordance with the statutory designated of who gets property under those circumstances.
The general intestate law provides that if a decedent is survived by a spouse, the spouse would generally be entitled to all of the estate if there were no surviving descendants of the decedent or ½ if there were surviving descendants of the decedent. If all of the surviving descendents were also descendents of the surviving spouse, the surviving spouse got the first $60,000.00 plus ½ of the balance.
By statute, homestead property was pulled out of the general mix of intestate assets. If the decedent was survived by a spouse and one or more descendents, the surviving spouse got a life estate in the homestead (ownership for his or her life) and the descendants got the homestead when the surviving spouse died.
The new statute, effective October 1, 2010, provides the surviving spouse a new option. In lieu of a life estate, the surviving spouse may demand a ½ interest in the homestead with the other ½ interest going to the decedent’s descendants. The election must be made within six (6) months of the decedent’s death and while the surviving spouse is still alive. Once made, the election is irrevocable.
If the surviving spouse elects a ½ interest, he or she becomes a co-owner with the descendants. In contrast to the life estate/remainder interest under previous statute, all of the owners would have a present interest in the property. That means any of them could petition the court to order the property sold and the proceeds distributed among the owners.
Under the old statute, the surviving spouse would have to get the descendants to agree on sale of the property and valuation of the surviving spouse’s interest if he or she wanted to sell the property and use the proceeds to move or for living expenses. The new statute provides greater flexibility, but also the opportunity for a descendant to force a court ordered sale and eviction of the surviving spouse in exchange for the surviving spouse receiving his or her pro rata portion of sale proceeds.
In some cases, the new law may be welcome flexibility for the surviving spouse. In others, potential for loss of lifetime use may be an unwelcome result. In any event, it is likely that surviving spouses and descendents will be discussing the new statute with their attorneys when homestead property is involved after October 1, 2010.