Estate Planning

Florida Homestead Protection in a Trust?

By David M. Goldman

As a Jacksonville Attorney at a Florida Estate Planning Firm, I have seen many issues concerning homestead protection in both probate matters and in estate planning. When you occupy a home in Florida as your main residence, this is called your homestead property. Notwithstanding some exceptions, the Florida Constitution protects the homestead from forced sale by creditors. If the owner of a homestead dies, the creditor protection of the home (from the decedent's creditors) continues for the spouse or family members who inherit the homestead. If the home becomes the homestead of the spouse or other family members then they shall also enjoy the same creditor protection from their creditors.

A Florida condominium was transferred to a Florida revocable trust. Upon the death of the first, the Florida Revocable Trust created a marital trust for the spouse, with the remainder to sons from a previous marriage. A few months after the condo was titled to the trust, the same condo was deeded directly to the spouse. A lawsuit ensued as to who owned the condo, the trust or the 2nd wife.

The sons won an initial victory, ensuring they would receive the condo upon the surviving spouse's death. The surviving spouse counter-sued for reimbursement of all condo related expenses paid with her own funds, and won a money judgment against the sons. The spouse wanted the sons to transfer a percentage of the condo interest to her, and the sons wanted the trust to sell the condo to obtain money to pay the judgment against them. The sons lost.

A Florida District Court ruled that homestead property (the condominium) held in a marital trust does NOT lose its creditor protection. Homestead issues can be complicated and diverse, it is recommended that you consult with a Jacksonville Homestead Attorney to learn more about the homestead protection and how it effects you and your family.

The rights of a surviving spouse changed in late 2010. These new rights give the option of a 50% interest in the sale of a homestead or a life estate. In most cases where the home is owned by husband and wife as Tenants in common, the surviving spouse will have full ownership of the home.

Full post as published by Florida Estate Planning Lawyer Blog on January 17, 2011 (boomark / email).