NEW LAW ALLOWS TRANSFER OF HOMESTEAD TO TRUST

Under Florida law, “homestead property” refers to the primary residence of a Florida resident, and is availed of certain benefits, including property tax reductions and creditor protection. However, there are restrictions on the devise of homestead property upon the owner's death. For example, a married person generally cannot bequeath homestead to other than a spouse. In default of such a transfer, a surviving spouse and the children of the deceased spouse may share in ownership of the homestead. This can be especially problematic in a second marriage , where the decedent's children are not children of the surviving spouse, or when the decedent's children are minors.

In estate planning, it is often preferred to leave assets in trust for a surviving spouse, whether in a marital or creditor shelter trust for tax planning, or in a joint revocable trust created by husband and wife. However, such planning can run afoul of the homestead restrictions. The result is the triggering of the default provisions, vesting the decedent's children with an interest in the homestead, and possibly necessitating a probate administration of the decedent's interest in the homestead.

With the enactment of new Section 732.7025, Florida Statutes, a deed can include language which waives the spousal homestead restrictions. Such waiver allows the homestead to remain in trust for the surviving spouse with no exposure to probate and no interest inadvertently passing to the decedent's children.