Estate Planning and Homestead in Florida

June 20, 2013 by Bart Chepenik

All states have their own constitutions and state laws. Because of this, states may have different provisions for how people are allowed to pass on their property at death. It is important to be aware of the laws of the state where you live, and also any states where you own property. Many non-Floridians purchase property in Florida and later retire and move to that property. However, those people may have done their estate plans in other states and not updated them after moving. This can create problems if the estate plan is not in compliance with Florida laws.

The Florida Constitution prevents a person from devising his or her homestead if he or she is survived by a spouse or minor child, except that the person may devise the homestead to his or her spouse if there is no minor child. Fla. Const. art. X § 4(c). This provision applies to homesteaded property even if it is held in a revocable trust. Fla. Stat. § 732.4015(2)(a). If the owner of the property attempts to devise the property in contravention of this constitutional provision, by devising the homesteaded property other than to the surviving spouse and children, then the spouse will have a life estate in the homesteaded property, and the children will share equally in the property upon the death of the surviving spouse. Fla. Stat. § 732.401(1). Alternatively, if the surviving spouse chooses, he or she may elect within six months after the decedent’s death to take a one-half interest in the homestead as a tenant in common with the remaining one-half interest passing to the decedent’s children.

The Florida Third District Court of Appeal recently heard a case involving Florida property that a Massachusetts man purchased and later made his homestead. See Aronson v. Aronson, 81 So. 3d 515 (Fla. 3d DCA 2012). In that case, Mr. Anderson owned a condominium in Key Biscayne, which he placed in a revocable trust. Under the terms of the trust, his wife would have a life estate in the property upon his death, and the property would pass to his sons by another marriage following his wife’s death. The trust also provided that the wife would be entitled to up to $5,000.00 per year from the trust. Several years later, the couple sold their house in Massachusetts, and moved to the condo in Key Biscayne. Some of the proceeds of the sale of the Massachusetts home, which had been titled exclusively in the wife’s name, were used to pay the mortgage of the Key Biscayne condo. Mr. Anderson died the next year, and the only asset in the trust was the Key Biscayne condo.

After Mr. Anderson died, his sons sought to have the Key Biscayne property sold in order to pay the amounts owing to Mrs. Anderson under the trust. Mrs. Anderson argued that the property was a homestead and protected by the Florida Constitution from a forced sale. The Third District Court of Appeal agreed, ruling that the Constitutional provision trumped Mr. Anderson’s provisions in his estate plan. The sons, as trustees of the trust, were not permitted to force the sale of the property.

The moral of the story is that it is important to create an estate plan that both reflects your desires for the disposition of your assets upon your death and also complies with the laws of your state. If you or someone you know has recently moved to Florida, or if you recently lost a loved one and are unsure of your rights under Florida law, please do not hesitate to contact the attorneys at Chepenik Trushin LLP, who are experienced in both estate planning and probate administration.