Single parents and estate planning issues

How can a single parent avoid homestead to protect a minor child?

            Florida homestead laws are complex, confusing, and enormously important for homeowners with or without an estate plan. Florida homestead law applies to three categories: (1) creditor protection against reaching a primary residence, (2) property tax exemptions and limitations on annual property value increases, and (3) restrictions on how a homeowner may devise property if there is a surviving spouse or a minor child.

Under this third category, Article X, Section 4(c) of the Florida Constitution states that a homestead property cannot be devised if the owner is survived by a spouse or minor child, except to the spouse if there is no minor child. This section only pertains to devises, or post-death transfers of property. A homeowner is free to mortgage, gift, sell, or deed the property freely while the homeowner is still living. If the homestead is jointly owned by both spouses, then the property can be freely transferred as long as both spouses join on the conveyance.

In other words, if a homeowner has a spouse or a minor child, then the homeowner is restricted in how they devise the property after the homeowner’s death. If survived by a spouse or minor child, a homeowner cannot leave the homestead property to a friend, cousin, neighbor, brother, or adult child. This transfer is legally invalid.

Florida liberally construes homestead laws for the protection of the family. The constitutional and statutory structure has been carefully designed to ensure a physical home for nuclear families without the worry of improper devises or meddlesome creditors seeking to repossess a home. But are there are some instances where homeowners desire to bypass the restrictive laws against improper devises? Certainly. Consider the following situation:

A married couple gives birth to a child, but soon after divorces while the child is still a toddler. The father, owning a sizeable home, is awarded custody of the child. Under Florida homestead law, the father’s home will automatically pass to his minor child upon death until the child turns 18. If the father were to pass away while the child was still a minor, the ex-wife, as the child’s mother, would then live in the home as guardian of the child (assuming she had not lost her parental rights). The father, concerned about this possibility, desires a way to avoid this scenario and prevent his ex-wife from inhabiting his house. But at the same time, the father wants to ensure a home for his child in the event of an untimely passing. There are several options that the father can pursue.

First, the father can re-marry and transfer ownership of the property to himself and his new spouse as joint tenants by the entirities, which would have the effect of vesting complete ownership in the home in the new spouse upon the father’s passing (this assumes, of course, that the new spouse would be granted custody over the minor, rather than the birth mother).

Second, the father can convey the home’s deed to both himself and another trusted party as joint tenants with right of survivorship. A joint tenancy requires that, if one of the joint tenants dies, the ownership interest in the house automatically passes to the other joint tenant. Thus, if the father transfers his home to both himself and his sister as joint tenants with right of survivorship, then the sister obtains full title to the home upon the father’s death. Property owned by joint tenants with right of survivorship is excluded from homestead under Fla. Stat. §732.401(5).  Though again, this assumes no disputes over the custody of the minor child.

Lastly, the father can transfer his home into an irrevocable trust. Fla. Stat. § 732.4017, enacted in 2010 for greater estate planning flexibility, allows a homeowner to live in the home and freely determine the home’s future owner without it classifying as a devise under homestead law.

Through any of these methods, a single parent can prevent the minor child from automatically obtaining sole interest in the home in the event of the parent’s death before the child reaches adulthood. These tools are complex, as are the homestead laws with which they interweave.

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Do not hesitate to call Bart Chepenik at 305-613-3548 anytime or Brad Trushin at 305-981-8889 to get premier legal advice for your estate planning needs.


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