Estate Planning and Administration Homestead Protections, Disputes, and Litigation

Homestead Protections, Disputes, and Litigation

In Florida, homestead protection is literally written into the Florida Constitution at Article X, Section 4, and has been liberally expanded by various state court decisions. Homestead law potentially involves a number of related areas of law, including asset protection planning, estate planning and administration, estate litigation, probate, and tax planning.

If you are not using Florida's strong homestead protection as an integral part of your asset protection and estate planning, contact the Florida and Palm Beach County probate lawyers at Comiter, Singer, Baseman & Braun for advice.

Florida's Homestead Protection

Florida's homestead protection exempts homestead property from seizure by judgment creditors. Put more simply, a creditor cannot force the sale of a homestead to satisfy any judgment against a debtor. Florida's homestead protection is especially strong as compared to other states, primarily because it stems from the state's constitution rather than a state statute.

Some of the strength of Florida's homestead protection comes from its broad coverage. Generally speaking, there is no monetary cap under the exemption. Therefore, Florida residents may invest millions of dollars into their homes, which is all protected. Furthermore, properties other than single-family homes qualify; the courts have extended homestead protection to properties such as manufactured homes, condominiums, and mobile homes.

There are some qualifying criteria for Florida homestead protection, including:

• Only permanent residents of Florida whose homestead property is their primary place of residence qualify for homestead protection. 
• Homestead protection goes into effect on the date of your ownership and occupancy, if there is an intent to make it your permanent Florida home. 
• Only principal places of residence (subject to lot size limitations) are eligible; investment properties do not qualify for homestead protection.
• Regarding lot size limitations, residences within a municipality on lots up to one-half acre and residences outside a municipality up to contiguous 160 acres are eligible for homestead protection. There is no restriction on the square footage of the physical residence or on the value of the property.
• Homestead property must be owned only by "natural persons"  rather than business entities such as LLCs,  partnerships, corporations, irrevocable trusts, and other forms of entities, although homestead owners may include living trusts and 99-year leasehold interests. 
• Adding a co-owner who does not permanently reside in the homestead property may render the property ineligible. 
• Finally, consensual liens such as IRS tax liens, mortgages, liens for real estate taxes, and laborers' liens for work performed at the home are not protected by homestead status.

Homestead Disputes and Litigation

Homestead disputes and litigation typically revolve around one or more of three distinct issues: protection from creditors in Florida, real estate taxes, and who inherits Florida homestead.

Real Estate Taxes

Florida residents enjoy several statutory tax exemptions that eliminate or reduce the amount of ad valorem (i.e., based on the assessed value of the property) taxes due regarding real property designated as the owner's permanent residence. Under Florida law, properties have a 3% cap or limit on the amount of assessed value that may increase each year.

Disputes may arise when property appraisers in Florida believe that such tax exemptions are being improperly claimed, and are forced to contest a property appraiser's cancellation of their Florida Homestead Tax Exemption.

Who Inherits Florida Homestead

A surviving spouse and minor children always inherit the Florida homestead property, regardless of what is bequeathed in a will. Absent any minor children or surviving spouse, the homestead can be bequeathed to anyone, typically by a will. 

Absent a will or minor children, the share of the surviving spouse depends on whether there are any adult children. If there are no surviving descendants, then the surviving spouse inherits the entire homestead. If there are one or more descendants, the surviving spouse takes a life estate, with the remainder in fee simple to the descendants. The surviving spouse may elect to take a 1/2 interest as tenant in common rather than a life estate.

Generally speaking, apart from the law that prioritizes surviving spouses and minor children over a valid will, the homestead, absent a valid will, is subject to common state-specific intestacy laws, and therefore subject to the kind of disputes, both informal and litigated, that typically accompany the passing of a person. These types of disputes are far more likely if there are pre-existing family disputes, substantial assets in question, or both.

Contact Comiter, Singer, Baseman & Braun for More Information About the Impact of Florida's Homestead Protection on Your Estate Planning, Taxes, and Probate

Our legal team has the wide breadth of experience necessary to analyze the impact of Florida's homestead protection laws and provide you with options for a comprehensive strategy regarding your estate planning, tax planning, and probate. We also have experience in the related areas of Florida law such as trust and trust administration, mediation, and business entities and transactions.

For more information on Florida's homestead protection, contact the Palm Beach County estate and probate lawyers at Comiter, Singer, Baseman & Braun, either online or by calling us at 561-626-2101 or toll-free at 800-226-1484. We work with clients in Palm Beach County, including Boca Raton and Palm Beach Gardens, and throughout the state of Florida.