How Do Florida’s “Homestead” Laws Impact Your Estate Plan?
If you are a homeowner in Florida, you are probably at least somewhat familiar with the state’s “homestead” laws. Article X, Section 4(a) of the Florida Constitution outlines what specifically is considered homestead property. Among other things, Florida law provides a tax exemption for homestead property, it protects your homestead (which is your primary residence) against being used to satisfy your debts if you cannot afford to pay, and even applies to limited personal property. Florida’s homestead laws have some important life planning implications as well. If you own homestead property, it is important for you to understand how these laws limit the options you have available.
If You are Married, You Cannot Devise Your Florida Homestead Property in Your Will
The first thing you need to know is this: Under Florida law, you cannot devise your homestead property in your will away from your spouse. You also cannot devise your homestead property if you have minor children. While it might seem obvious, and even imperative, to make sure you cover your home in your life plan, this actually isn’t an option that you have available. If you do include provisions regarding your homestead property in your will away from a spouse or minor children, they won’t be enforceable, and your homestead will still be distributed according to Florida law.
By law, homestead property transfers to your spouse and your minor children at the time of your death. Your spouse has the right to choose either: (i) to own a life estate in the property (in which case your children will become the owners of the property at the time of your spouse’s death); or, (ii) to share undivided ownership with your children as tenants in common. In either scenario, neither your spouse nor your children will be able to sell the property during your spouse’s lifetime without the other’s consent.
Depending on your life planning goals, this might be okay. Or, it might not. While Florida’s homestead laws can present planning challenges under a number of different circumstances, they most commonly create issues in situations where the first spouse to die has children from a prior marriage.
How Can You Plan Around Florida’s Homestead Laws?
Let’s say Florida’s homestead laws apply to your primary residence; and, let’s say that, for whatever reason, you do not wish to leave your home to your spouse. What options do you have available?
Most likely, your best option will be to enter into a postnuptial agreement. While you cannot terminate your spouse’s right to your homestead property through a will or trust, you can do so through a postnuptial agreement. This is because your spouse is a party to the agreement; and, by signing the agreement, he or she is affirmatively consenting to give up their right to the property. Of course, depending on the dynamics of your marriage, this could be a touchy subject. In any case, in order to make sure you validly terminate your spouse’s interest in your homestead property, you will want to work with an experienced attorney to put your “postnup” in place.
Questions? Schedule a Confidential Initial Consultation Today
If you have more questions about how to protect your homestead property in your lifeplan, I encourage you to get in touch. To schedule a confidential initial consultation, call 904-329-7242 or contact us online.
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