Married and think you can devise your home to your children when you die?
Not so fast I often tell my clients during their Family Succession Strategy Session.
Strap on your seatbelts for this email and hunker down because I am about to burst your (homestead) bubble about what you can and cannot do with your Florida home in your estate plan.
Florida law guarantees inheritance rights of a person’s home to their surviving spouse. Sounds great in theory and I can certainly understand the public policy behind the law but it also creates unintended consequences for many Florida residents, especially in blended families.
If you are survived by a spouse in Florida, your spouse is guaranteed a life estate in your home when you die and also has the option of instead electing a 50% interest in the property. Assuming you do not have minor children, you can devise the remaining interest in your home to whomever you choose. BUT YOU CANNOT “CUT OUT” YOUR SPOUSE’S INHERITANCE RIGHTS TO THE HOME WITHOUT THEIR EXPRESSED WRITTEN CONSENT.
Here are some recent case studies from my office alone from over the past couple of months which illustrates the many restrictions on the desired devise of Florida homesteads:
Case Study #1: Husband remarries a woman from another country after his first wife of fifty years dies. Husband has six grown children from his first marriage. Husband wants to leave the house to one of his grown children who lives with him.
Unfortunately, without his new wife’s written waiver of her homestead rights, the Husband’s devise of his home to his son will be ineffective. Sure, he can specify the gift in his Will or even sign a deed now to that effect, but without his new wife’s written agreement, the deed or Will will not be honored by the courts. It is irrelevant that the Wife lives in a foreign country and has never even visited the home.
Solution: Have new wife sign a written waiver of her homestead rights or, in the case of a deed, have the wife sign the deed and include the written waiver in the deed itself.
Case Study #2: Wife and her second Husband move to Florida from another state. They signed a prenuptial agreement before their marriage each waiving all rights to the other’s assets in the event of death or divorce. The Wife purchased the Florida home in which they reside and it is titled solely in her name. Wife wants to leave the home to her grown children from a prior marriage but allow the Husband a suitable amount of time to relocate after her death.
In this case, even though the Wife and her Husband have a prenuptial agreement, the agreement was signed when they were residents of another state and the agreement does not specifically address nor waive any Florida homestead rights. So, presumably, the Husband still has his homestead claims to the Florida property if he survives the wife.
Solution: Husband and Wife should sign an addendum to their prenuptial agreement (each being represented by separate Florida counsel) in which they each waive their rights to one another’s Florida homestead property, whatever that may be upon the first spouse’s death.
Case Study #3: Wife is diagnosed with a terminal illness and given a short window of time to get her affairs in order. Wife and her second husband recently moved to Florida and have no written estate plan. Wife purchased their Florida home and wants to give the home to one of her daughters (and not her other child) while still allowing her husband to continue living in the home for so long as he desires. Not knowing any Florida attorneys, Wife contacts an attorney from her hometown in another state to draft her estate planning documents, including a living trust in which Wife meticulously spells out her wishes with her Florida home. Wife signs the trust and a deed purporting to retitle her home into her trust so that it will avoid Florida probate.
Again, in this situation, the Husband did not sign the deed nor did he waive his rights to the home. It is irrelevant that the Husband is being gifted a life estate in the home through the Wife’s trust. The home’s transfer to the trust by way of the deed signed by the Wife alone is ineffective to transfer title because the Husband did not join in the deed. The house is still in the Wife’s name when she dies which means that a probate is necessary to transfer title of the home and her husband will inherit his life estate in the home (or a 50% interest, his choice) with the remaining interest passing to both of the Wife’s children, not just the one daughter she wanted to inherit the property.
Solution: Wife should have consulted with a Florida estate planning attorney who (hopefully) would have advised her about how to legally carry out her homestead wishes. At the very least, Husband should have signed the deed transferring the home into Wife’s trust.
Case Study #4: Wife and her Husband have been separated for years, each maintaining their own Florida homesteads. They do not have a prenuptial agreement nor do they have plans to divorce for various financial reasons. Wife is terminally ill and wants to leave her home to her children by a prior marriage.
Even though the couple is separated and the Husband has never lived in the Wife’s home, he will have his homestead rights to the Wife’s home if she dies before him (vice versa is also true).
Solution: The couple can get divorced or they can sign a postnuptial agreement waiving their rights to the other’s homestead property upon death.
Experts call Florida Homestead law the “chameleon” and rightly so. Even after twenty-three years practicing law, I still often review my statute books on homestead rights when I am advising clients and crafting estate plans for them.
If you own a home in Florida, make sure that you are advised by a Florida licensed attorney who specializes in family succession planning. Trust me, you will likely save your children thousands of dollars in unnecessary legal fees, many headaches, and family fights in the future when you heed this advice.
Kristen “Florida Homestead Advisor” Marks
P.S. Want to learn what YOU can and cannot do with your Florida home after you die? Schedule your Family Succession Strategy Session with us to find out. Call or go online today to schedule your consultation. 850-439-1191