Homestead Limited Right to Devise

Most people think if they own a home, they can do anything they want with it, including direct who gets it when they die. That might be the case in many states, but not Florida. Florida’s Constitution says otherwise when homestead is involved.

The Florida Constitution states that homestead shall not be subject to devise (given at death) if its owner is survived by a spouse or minor children. The only exception is homestead may be devised to the owner’s spouse if the owner has no minor child. That provision includes a will, a revocable trust and any other method by which an owner wants to give his or her home away at death.

What happens if someone tries to leave a homestead through will or trust in violation of the Florida Constitution? The effort fails and the home passes by intestacy. That means it ends up with beneficiaries established by statute to govern disposition property when someone does not have a will or trust.

This can be a real problem when an estate plan is prepared that provides for distribution of part or all of the homestead in violation of the Florida Constitution. It can foul up tax planning and interfere with the ultimate plan for disposition of wealth. This can be a particular problem in a second marriage, where one of the spouses owns the homestead and wants it to go to his or her children. In that case, an estate plan often provides that the surviving spouse may use the home for his or her life, possibly with conditions, and at death of the surviving spouse the home goes to the children of the first spouse to die. Florida’s Constitution does not allow that.

Florida statutes dictate what happens when someone makes an invalid devise of homestead. If the person is survived by a spouse and descendants, the spouse gets a life estate and the descendants get the property after the spouse dies. A life estate means the spouse owns the property for his or her life and can use it in any reasonable way. A surviving spouse can live in the home, rent it, or simply let it stand idle as long as the surviving spouse takes reasonable care of the property that will end up with the descendants.

Surviving spouses felt boxed in by the life estate situation. They wanted to move but needed money to either rent or buy another place. Selling a life estate can be difficult, so a lot of surviving spouses ended up staying in a house they didn’t want or could barely afford. The legislature solved that problem by amending the statutes to allow the surviving spouse to “trade” a life estate for 50% outright ownership.

A 50% outright ownership might not seem like much improvement, as the surviving spouse now would own the property with the descendants. After making the trade, the surviving spouse can go to court and get the court to sell the property and give the surviving spouse half of the proceeds if the descendants didn’t cooperate with the sale. The surviving spouse could not do that with a life estate.

The other benefit to a surviving spouse making the trade is the surviving spouse could then leave his or her 50% to his or her children and not the descendants of the other spouse. That is often the factor that drives this decision. The surviving spouse’s children share appreciation of the home value and the surviving spouse usually still gets to live there unless the other spouse’s descendants demand the property be sold as co-owners. The surviving spouse’s children get nothing unless the surviving spouse elects to trade the life estate for 50% ownership.

Florida allows a spouse to waive homestead rights. Waiver is treated as if the surviving spouse did not exist for homestead purposes. Waiver is relatively simple and can be a separate document, or part of a prenuptial or postnuptial agreement. Waiver must be in writing and signed by the spouse to be bound by it.

The constitutional restriction does not interfere with property owned by husband and wife as tenants by the entirety or joint ownership with right of survivorship. When the homestead is owned in that manner, the survivor owns all. That is due, in part, to each of the owners owning 50% of an interest and not simply 50%. Survivorship operates on the entire property instantly upon death of the first spouse to die. The surviving spouse is free to devise the homestead to anyone he or she desires, as long as there are no minor children or a new spouse.

Florida homestead has many facets. Almost everybody knows about the property tax benefits. Some know that homestead property is exempt from creditor claims. The limitations on the right to devise property often comes as a surprise and serves as yet another example of why working with an experienced estate planning attorney is so important.