Written by Jeffrey Skatoff • May 10th, 2012
Florida Homestead laws have long been a trap for the unwary due to the unique and specialized nature of Florida Homestead laws. To further complicate the matter, Fla. Stat. § 732.401 was revised effective October 1, 2010. This revision changed the rules for spouses and descendants receiving Homestead property at death.
Article X Section 4(c) of the Florida Constitution limits who can receive Homestead property upon the death of an owner if he or she is survived by a spouse or a minor child. The revision to Fla. Stat. § 732.401 allows the surviving spouse to make an election, within six months from the date of death, to take a one-half interest as a tenant in common in the Homestead property instead of a life estate.
A one-half tenant in common interest gives the surviving spouse an ownership interest in the Homestead, which allows the surviving spouse to bring a partition action to sell the property. If the property is sold, the surviving spouse will generally receive one-half of the proceeds of any sale. Prior to the enactment of the revised Florida Homestead statute, if the Homestead was not devised in a way that was permitted by Florida law, the surviving spouse automatically received a life estate in the Homestead property and any minor children received a vested remainder in the property. The life estate interest could not be partitioned, which required the surviving spouse and children of the deceased to negotiate a sale of the Homestead. If there was no agreement, the property could not be sold.
These arcane rules strained many family relationships especially, in second marriages. In these situations, the Florida Principal and Income Act governs the allocation of expenses between the life estate and vested remainder interest. The surviving spouse is generally responsible for any interest payments on the mortgage, property taxes, property insurance and repairs and the children are generally responsible for principal mortgage payments on the residence and any substantial capital expenditures.
To add another complicating factor, if the surviving spouse ever wanted to downsize, the surviving spouse had to negotiate with the children to allow a sale and they would have to determine a value for her life estate. While many see the new statute as a beneficial change, it is also important to note that it is to the detriment of the decedent’s minor children in many cases. A very elderly widow will receive one-half of the Homestead, rather than a life estate which may have zero value. The real winners in some situations will be the surviving spouse's children from an earlier marriage.
Therefore, this revised statute requires additional planning at the forefront to take into consideration this new contingency, and adds an additional issue to consider during the estate administration process. It is also important to note that the revised statute also approves of new planning techniques available to those with special needs children and with other unique planning objectives.
A complete treatment of the Florida law on surviving spouses is available.
The attorneys of Clark Skatoff are available for a consultation, at (561) 842-4868.
The Florida Homestead Statute is reproduced below.
732.401 Descent of homestead.—
If not devised as authorized by law and the constitution, the homestead shall descend in the same manner as other intestate property; but if the decedent is survived by a spouse and one or more descendants, the surviving spouse shall take a life estate in the homestead, with a vested remainder to the descendants in being at the time of the decedent’s death per stirpes
In lieu of a life estate under subsection (1), the surviving spouse may elect to take an undivided one-half interest in the homestead as a tenant in common, with the remaining undivided one-half interest vesting in the decedent’s descendants in being at the time of the decedent’s death, per stirpes.
The right of election may be exercised:
1. By the surviving spouse; or
2. With the approval of a court having jurisdiction of the real property, by an attorney in fact or guardian of the property of the surviving spouse. Before approving the election, the court shall determine that the election is in the best interests of the surviving spouse during the spouse’s probable lifetime.
b) The election must be made within 6 months after the decedent’s death and during the surviving spouse’s lifetime. The time for making the election may not be extended except as provided in paragraph (c).
(c) A petition by an attorney in fact or guardian of the property for approval to make the election tolls the time for making the election until 6 months after the decedent’s death or 30 days after the rendition of an order authorizing the election, whichever occurs last.
(d) Once made, the election is irrevocable.
(e) The election shall be made by filing a notice of election containing the legal description of the homestead property for recording in the official record books of the county or counties where the homestead property is located. The notice must be in substantially the following form:
ELECTION OF SURVIVING SPOUSE
TO TAKE A ONE-HALF INTEREST OF
DECEDENT’S INTEREST IN
1. The decedent, ________________, died on ____________. On the date of the decedent’s death, The decedent was married to ____________, who survived the decedent.
2. At the time of the decedent’s death, the decedent owned an interest in real property that the affiant believes to be homestead property described in s. 4, Article X of the State Constitution, that real property being in ________ County, Florida, and described as: (description of homestead property) .
3. Affiant elects to take one-half of decedent’s interest in the homestead as a tenant in common in lieu of a life estate.
4. If affiant is not the surviving spouse, affiant is the surviving spouse’s attorney in fact or guardian of the property and an order has been rendered by a court having jurisdiction of the real property authorizing the undersigned to make this election.
Sworn to (or affirmed) and subscribed before me this ____ day of (month) , (year) , by (affiant)
(Signature of Notary Public-State of Florida)
(Print, Type, or Stamp Commissioned Name of Notary Public)
Personally Known OR Produced Identification
(Type of Identification Produced)
(3) Unless and until an election is made under subsection (2), expenses relating to the ownership of the homestead shall be allocated between the surviving spouse, as life tenant, and the decedent’s descendants, as remaindermen, in accordance with chapter 738. If an election is made, expenses relating to the ownership of the homestead shall be allocated between the surviving spouse and the descendants as tenants in common in proportion to their respective shares, effective as of the date the election is filed for recording.
(4) If the surviving spouse’s life estate created in subsection (1) is disclaimed pursuant to chapter 739, the interests of the decedent’s descendants may not be divested.
(5) This section does not apply to property that the decedent owned in tenancy by the entireties or joint tenancy with rights of survivorship.
History.—s. 1, ch. 74-106; s. 17, ch. 75-220; s. 37, ch. 2001-226; s. 12, ch. 2007-74; s. 7, ch. 2010-132.
Note.—Created from former s. 731.27.