Tuesday, June 20, 2006

RESTRAINTS ON ALIENATION VIA WILL [FLORIDA]

Joint owners of property, that own the property as tenants in common, generally have the ability to sell their interest in the property, or to seek a severance of their interest from the interests of their co-owners. If the property cannot be physically divided to accomplish a severance, it will be sold and the proceeds divided among the co-owners.

The question for the day is whether a testator can provide under his or her Last Will that the recipients of property passing under the Will to several beneficiaries can be restricted by the provisions of the Will from selling or severing their interests without the consent of the other co-owners. This was the issue in Vinson et al v. Johnson et al, 31 Fla. L. Weekly D1659c (1st DCA June 16, 2006). In that case, the decedent provided in his Last Will that "[t]he “Vinson Estate” shall not be subject to partition or forced sale by any heir, but shall only be sold upon agreement of all heirs." The Vinson Estate was a 34 acre farm and home in Alachua County, Florida. Several of the heirs sought partition of the Vinson Estate, challenging the enforceability of the restriction in the Will.

The Court held that the restriction was an impermissible restraint on alienation, and was unenforceable - therefore, partition was allowed. The Court noted that the restrictions on alienation (transfer) were inconsistent with basic rights of ownership in property. By denying the right to sell or realize the value of the property, the heirs were denied an essential aspect of ownership. The Court did note that a testator may restrict or postpone the right of partition FOR A LIMITED TIME when necessary to accomplish the plan of the Will. Such a restriction might be upheld if it merely keeps the property intact for a limited time, for example, until the youngest of the children reaches the age of majority. But to prohibit the sale of property during the entire lifetime of each of the children would be inconsistent with the devise itself. The Court also noted that the right to partition can be waived by agreement, but that merely accepting a devise under a Will does not constitute agreement for this purpose.

Testators seeking to restrict the ability of heirs to sell property or to keep a parcel of property together for the benefit of numerous beneficiaries should thus use a trust or similar devise to accomplish such goals in lieu of restrictions on alienation.
Post a Comment