Homestead Planning Under Florida's New "Safe Harbor" Statute.

Author:Goethe, Jeffrey S.
Position:Real Property, Probate and Trust Law
 
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F.S. [section]732.702 provides a statutory procedure for waiving spousal rights, including homestead rights, under written contracts, agreements, or waivers. New F.S. [section]732.7025 provides a simplified method for a spouse to waive his or her homestead rights in a deed. It is intended to provide a "safe harbor" for the waiver of spousal homestead rights through a deed (with specially drafted language included in the deed). The new statute relates solely to the waiver of a spouse's inheritance rights as to homestead property and does not result in the waiver of homestead asset protection rights, restrictions on lifetime alienation or other spousal inheritance rights, such as elective share. The legislation is the product of study and analysis of the Homestead Issues Study Committee of the Real Property, Probate and Trust Law Section of The Florida Bar.

The safe harbor language in [section]732.7025(1) is simple and straightforward: "By executing or joining this deed, I intend to waive homestead rights that would otherwise prevent my spouse from devising the homestead property described in this deed to someone other than me."

The new statute also confirms that a waiver of one homestead right is not a waiver of other protections:

(2) The waiver language in subsection (1) may not be considered a waiver of the protection against the owner's creditor claims during the owner's lifetime and after death. Such language may not be considered a waiver of the restrictions against alienation by mortgage, sale, gift or deed without the joinder of the owner's spouse.

The new legislation became effective July 1, 2018. (1) The history of homestead waivers and the ramifications of a waiver of constitutional rights are not simple. This article attempts to preserve the high level of caution and respect that should be present in any transaction involving constitutional homestead rights.

Homestead Rights for Surviving Spouses

Fla. Const. [section]4(c), art. X, is the source of the protection for surviving spouses:

The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner's spouse if there be no minor child. The owner of homestead real estate, joined by the spouse if married, may alienate the homestead by mortgage, sale or gift and, if married, may by deed transfer the title to an estate by the entirety with the spouse. If the owner or spouse is incompetent, the method of alienation or encumbrance shall be as provided by law. Statutory Implementation of Devise Restrictions

While the Florida Constitution states when a homestead cannot be devised, F.S. [section]732.401 determines the descent of devise-restricted homestead when it is not devised in a manner authorized by the Florida Constitution or when it is not subject to devise. Devise-restricted homestead that is not validly devised or is not devisable descends as other intestate property, unless the decedent is survived by a spouse and one or more descendants, in which case the surviving spouse receives a life estate with a vested remainder in the then living descendants, per stirpes. However, a surviving spouse has six months from the date of the other spouse's death to elect a 50 percent tenant-in-common share instead of the default life estate. (2)

Definition of "Devise"

F.S. [section]731.201(10) defines a "devise" as follows:

(10) "Devise," when used as a noun, means a testamentary disposition of real or personal property and, when used as a verb, means to dispose of real or personal property by will or trust. The term includes "gift," "give," "bequeath," "bequest," and "legacy." A devise is subject to charges for debts, expenses, and taxes as provided in this code, the will, or the trust.

F.S. [section]732.4015 provides further clarification for the devise of homestead property by extending the definition of "owner" to the settlor or grantor of a revocable trust and the definition of "devise" to include a "disposition by trust of that portion of the trust estate which, if titled in the name of the grantor of the trust, would be the grantor's homestead." Thus, for homestead in a decedent's name or for homestead in a revocable trust, the devise restrictions apply.

Public Policy and Constitutional Homestead Rights

Although real estate attorneys, probate and trust practitioners, and estate planners are often frustrated by the complications resulting from the homestead devise restrictions, they are nonetheless an important constitutional right for Floridians and their families. It is a protection for not only the home, but a protection against financial misfortune for the homeowner and the homeowner's family. (3)

In Chames v. DeMayo, 972 So. 2d 850 (Fla. 2007), the Florida Supreme Court distinguished the constitutional homestead protection from other constitutional protections in the context of waiving one's constitutional rights.

It is true that we recently noted that "most personal constitutional rights may be waived." In re Rule 4-1.5(f)(4)(B), 939 So. 2d at 1038; see also In re Shambow's Estate, 153 Fla. 762, 15 So. 2d 837, 837 (1943) ("It is fundamental that constitutional rights which are personal may be waived."). However, an individual cannot waive a right designed to protect both the individual and the public. See, e.g., Coastal Caisson Drill Co. v. Am. Cas. Co. of Reading, Pa., 523 So. 2d 791, 793 (Fla. 2d DCA 1988), approved, 542 So. 2d 957 (Fla. 1989); Asbury Arms Dev. Corp. v. Fla. Dep't of Bus. Regulations, 456 So. 2d 1291, 1293 (Fla. 2d DCA 1984). We have repeatedly recognized that the homestead exemption protects not only the debtor, but also the debtor's family and the [s]tate. See Havoco, 790 So. 2d at 1020; Snyder, 699 So. 2d at 1002; Caggiano, 605 So. 2d at 60; Lopez, 531 So. 2d at 948; Slatcoff, 76 So. 2d at 794; Hill, 84 So. at 192. Therefore, the right to the homestead exemption is not purely personal as some others are. In 1988, the Florida Supreme Court explained the policy as it applies to the protection from forced sale, which is also included in art. X, [section]4.

For the reasons advanced by the personal representatives, we reject the creditors' position. For over a century, Florida has by constitutional provision made the home-place exempt from the claims of creditors. As a matter of public policy, the purpose of the homestead exemption is to promote the stability and welfare of the...

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