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Monday, September 08, 2014

HOMESTEAD STATUS WITHOUT CURRENT USE OR POSSESSION; INTERACTION OF HOMESTEAD SUCCESSOR RIGHTS WITH TERMS OF MARITAL SETTLEMENT AGREEMENT [FLORIDA]

Under Florida law, a decedent will be restricted in devising his or her homestead property at death. If those restrictions apply, surviving spouses and heirs received the interests they would receive under intestacy law. For this reason, among others, a determination is often needed whether residential property qualifies as “homestead” for these purposes.

In a recent Florida case, at the time of the decedent’s death his decedent’s former wife was living in the former marital home with the two children of the marriage pursuant to a provision in a marital settlement agreement awarding the former wife exclusive use and possession until the youngest child graduated from high school. After that, the residence would be sold and the proceeds split between the former husband and wife. The decedent held a tenants in common ownership interest in the residence with his former wife.

The decedent did not reside in, or otherwise have any use or possession of the residence at his death. The court nonetheless found it to be homestead property. How so?

It is a common misconception that a decedent must reside on the property for it to be his homestead. It is enough that the owners family resides on the property. Here, the decedent’s sons, whom he still supported financially, continued to live on the property.

Homestead status was relevant here since it resulted in the decedent’s new wife obtaining an interest in the homestead that she would not have otherwise received, pursuant to Florida intestacy provisions that apply to homestead property. Interestingly, even though the new wife received this interest (here, a life estate), she took that interest subject to the rights of use granted to the former spouse and required sale provisions under the marital settlement agreement. It was argued that the marital settlement agreement removed the property from homestead status – the court instead allowed the homestead status and the resulting dictated ownership at death, but left the successor owners subject to the limitations and terms of the marital settlement agreement as to the use and disposition of the homestead.

Estate of Friscia v. Friscia, 39 Fla. L. Weekly D1810a (August 27, 2014)

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