Florida homestead is a wonderful thing. When you invest in your home, you’re investing in what is most likely the largest purchase of your life. You’ll want to protect this asset from creditors. Guess what? Florida homestead offers great creditor protection.
As with anything, there are of course problems that can arise. If your estate plan does not properly address certain issues, you may run into quite an array of problems. A prime example of a very typical Florida homestead issue is when there is a second marriage involved.
The issues most often come up when one spouse owned the property before getting married. It is common that the new spouse’s name is not added to the deed for the homestead. In some instances, this is deliberate. The spouse who owned the house before the marriage wants it to go to his or her own children after he or she dies, and feels that not having the new spouse’s name on the deed will make this happen. However, in other instances, the recorded owner of the homestead wants the property to pass to the new spouse and thinks this is automatic. Both are incorrect. For simplicity’s sake, let’s talk about a piece of homestead property that is paid off with no mortgage, and a couple where the husband and wife have no children together, but he has children from a prior marriage. What happens when he dies?
If both spouses have their names on the homestead as tenants by the entireties when the husband dies, the widow owns the property. End of story. However, if only his name is on the deed when he dies, the widow still has rights to the homestead. However, the right is to have what is called a life estate in the property, which means the ability to use the property for the rest of her life, then after her life, the property goes to the deceased husband’s children.
Life estates are messy. If the place needs a new roof, who pays? If someone wants to tap into the equity in the home to get some cash, who will lend to them? Fortunately, since late 2010 a law has been in place which allows the widow to make an election to simply own a ½ interest in the homestead rather than having a life estate. The deceased husband’s children get the other ½. This makes managing the property and its expenses easier, and it makes selling the place much less complicated than when a life estate is involved. The catch is that the election to take the ½ interest must be made within six months of the date of death. That isn’t much time, and there are very few exceptions to the rule.
If you or someone you know is married and owns a home but only one spouse’s name is on the deed, consult with a qualified Florida estate planning attorney to make sure everything is set to go the way everyone wants it to when the first spouse passes away. Making changes now is easy. Making changes later will be much more expensive and may not be possible at all! Contact Your Caring Law Firm at (407) 622-1900.