A new Florida law, effective July 1, 2018, adds much needed clarification to Florida’s Homestead Act; however, at the same time, it creates a homestead trap that could frustrate the estate plans of Florida residents.
If you are married or have minor children, the Florida Constitution restricts how you may devise your homestead property upon death, whether it is passing through a will or trust, and a surviving spouse must receive at least a life estate in the homestead. Sometimes one spouse may want to waive his or her homestead rights as part of the couple’s overall estate plan. For instance, a married couple may want to separate and balance their estates for tax purposes, or they may have other personal considerations common in second marriages and blended families.
In the past, Florida courts have held that a spouse could waive homestead rights if there was a specific language. For example, if Husband and Wife signed a deed granting their joint property to Wife’s trust, “together with all the tenements, hereditaments and appurtenances thereto,” the deed itself would have been considered an effective waiver of Husband’s rights in the property.
But now, pursuant to Section 732.7025, Florida Statutes, which became effective on July 1, 2018, if a spouse intends to waive his or her homestead rights, the following, or substantially similar, language must appear on the face of the deed:
- “By executing or joining this deed, I intend to waive homestead rights that would otherwise prevent my spouse from devising the homestead property described in this deed to someone other than me.”
To illustrate the effect of this statute, consider the following scenario:
- Husband and Wife establish and fund separate trusts as part of their estate plan. Together they signed a deed transferring their joint homestead property to Husband’s trust. Husband dies. Upon his death, the homestead property is to flow into an irrevocable trust for the benefit of Wife during her lifetime. After Wife’s death, it is to pass outright to two of Husband’s three adult children. The third adult child is estranged from the family and was disinherited completely in Husband’s estate plan.
Without a valid waiver, Husband’s plan violates homestead law, and Wife must receive at least a life estate, so the devise to an irrevocable trust, despite it being for the primary benefit of Wife, does not comply. Therefore, if the spousal waiver language of Section 732.7025 is missing from the deed to the trust, the entire devise will fail.
The consequence of an invalid devise is severe. Default law will apply, and the property will pass as if Husband never did any estate planning. Not only does the property come out of the trust and to Wife for life, but upon her death, the remainder will be shared equally by all adult children, including the child who Husbands clearly intended to disinherit. The final blow in this scenario is that, at the moment of Husband’s death, it is already too late for Wife to waive her homestead rights.
While the Florida Constitution offers some of the strongest homestead protections in the country, it is important to understand the role it may play in your individual estate plan, as it can often override a homeowner’s intentions. As noted above, an invalid homestead devise in a will or trust can result in harsh consequences which cannot be cured by the surviving spouse. Your estate plan should be reviewed with an attorney who understands the intricate nuances of Florida’s Homestead Act and can explain the effect it will have on your estate. This is especially true for those individuals who are considering changing their residency to Florida from another state.
Avi S. Tryson, Esq., is Partner of the Law Firm Goede, DeBoest & Cross. Ask questions about your issues for future columns, send your inquiry to: email@example.com. The information provided herein is for informational purposes only and should not be construed as legal advice. The publication of this article does not create an attorney-client relationship between the reader and Goede, DeBoest & Cross, or any of our attorneys. Readers should not act or refrain from acting based upon the information contained in this article without first contacting an attorney, if you have questions about any of the issues raised herein. The hiring of an attorney is a decision that should not be based solely on advertisements or this column.