In its most recent legislative session, the Florida legislature enacted a number of additions and modifications to Florida statutory law relating to Florida's homestead exemption. These provisions can be summarized as enhancing or clarifying the exemption. The following is a summary of the new provisions, along with some excerpts.
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736.0201(7): A proceeding
to determine the homestead status of real property owned by a trust may be
filed in the probate proceeding for the settlor’s estate if the settlor was
treated as the owner of the interest held in the trust under s. 732.4015. The proceeding
shall be governed by the Florida Probate Rules.
This provision provides
jurisdiction to the probate court in a probate proceeding of a revocable trust
settlor to determine the homestead status of real property owned by a trust.
This should only apply to revocable trusts defined under Fla.Stats. §
733.707(3) and not other trusts, per the reference to Fla.Stats. § 732.4015.
Fla.Stats. § 732.4015 references Fla.Stats. § 733.707(3). Generally, a revocable
trust described in Fla.Stats. § 733.707(3) is one which the grantor has a right
of revocation at death. Fla.Stats. § 733.707(3)(e) defines a “right of
revocation” for this purpose as the power to amend or revoke the trust and
revest the principal of the trust in the decedent, or withdraw or appoint the
principal of the trust to or for the decedent’s benefit.
This provision was added due to
a perceived lack of apparent authority for the probate court to otherwise make
that homestead determination in these circumstances. Bill Analysis and
Fiscal Impact Statement, to CS/CS/SB 1070 dated April 15, 2021, Page 5.
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736.1109 (1): If a devise of
homestead under a trust violates the limitations on the devise of homestead in
s. 4(c), Art. X of the State Constitution, title shall pass as provided in s.
732.401 at the moment of death.
The constitutional restrictions
on the devise of homestead are not defeated via ownership of the homestead of a
decedent in a trust, subject to statutory carve-outs. This provision clarifies
that if there is an improper testamentary devise in the trust, the property
will pass to the same recipients who would receive it as if the decedent died
owning the property directly and had attempted an invalid testamentary devise -
that is Fla.Stats. § 732.401 of the Probate Code would apply, and the title
passage occurs at the moment of death even though titled in the trust.
The provision applies only to
revocable trusts and testamentary trusts.
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736.1109 (2) A power of sale
or general direction to pay debts, expenses and claims within the trust
instrument does not subject an interest in the protected homestead to the
claims of decedent’s creditors, expenses of administration, and obligations of
the decedent’s estate as provided in 736.05053.
If a trust holds an interest in
a decedent’s protected homestead at death, this provision codifies a parallel
probate result which applies to directly owned homesteads, such that a general
power of sale or direction to pay debts, expenses, and claims of the decedent in
the trust instrument does not in and of itself make the homestead subject to
claims of the decedent’s creditors, expenses of administration, and obligations
of the decedent’s estate.
The provision applies only to
revocable trusts and testamentary trusts.
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736.1109(3) If a trust
directs the sale of property that would otherwise qualify as protected
homestead, and the property is not subject to the constitutional limitations on
the devise of homestead under the State Constitution, title shall remain vested
in the trustee and subject to the provisions of the trust.
Homestead property owned by a
decedent that is protected homestead (i.e., it is directed to pass to an heir)
and that is devisable, passes automatically at death to the recipient heir(s) and
is not part of the probate estate. However, that is not the case if the
decedent’s last will requires that property be sold and the proceeds to be
divided among the heirs of the decedent or applied to estate obligations.
This provision extends this principle
to when a trust owning the property has the direction for sale - in that
circumstance, the trustee retains title to the property, and it does not pass
automatically to the designated heir(s).
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736.151 Homestead property.—
(1) Property that is
transferred to or acquired subject to a community property trust may continue
to qualify or may initially qualify as the settlor spouses’ homestead within
the meaning of s. 4(a)(1), Art. X of the State Constitution and for all
purposes of general law, provided that the property would qualify as the
settlor spouses’ homestead if title was held in one or both of the settlor
spouses’ individual names.
(2) The settlor spouses shall
be deemed to have beneficial title in equity to the homestead property held
subject to a community property trust for all purposes, including for purposes
of s. 196.031.
This provision is part of the
new community property trust provisions of the Florida Trust Code. They seek to
allow homestead protections to homestead property held in a community property
trust.
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736.1104. Person Killer not
entitled to receive property or other benefits by reason of victim's death --
(3) A beneficiary of a trust
who was convicted in any state or foreign jurisdiction of abuse, neglect,
exploitation, or aggravated manslaughter of an elderly person or a disabled
adult, as those terms are defined in s. 825.101, for conduct against a settlor
or another person on whose death such beneficiary's interest depends is not
entitled to any trust interest, including a homestead dependent on the victim's
death, and such interest shall devolve as though the abuser, neglector,
exploiter, or killer had predeceased the victim.
This provision will void
transfers of homestead interests in trusts where the recipient is convicted of
neglect, exploitation, or aggravated manslaughter. What happens if the surviving
spouse is the person so convicted? Does the spouse lose the interest if it was
devised to the spouse under the trust? It would appear that the trust transfer
is void, but would the Florida Constitution limits on devise when there is a
surviving spouse restore the transfer to the trust? Interestingly, the
Constitution does not directly provide that the spouse succeeds to the interest
- this incurs under Florida statutory law. That being the case, does this mean
that this provision can be interpreted as also overriding the statutorily
required transfer to the surviving spouse in the event of a prohibited devise,
and/or does the Florida Consitution nonetheless still require passage to the
surviving spouse since it is the spouse that the constiutional interest seeks
to protect (in addition to the protection of minor children)?
Note that a surviving spouse is
entitled to the decedent’s homestead under the Florida Constitution (wholly, or
in part, if there are surviving minor children), such that presumably this
statutory provision does not void that spouse’s interest if they are the person
so convicted.
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Changes to Fla.Stats. Section
196.075.
This statute is modified to
avoid the need for representations of income beyond the first year of exemption
in regard to the additional homestead ad valorem exemption to persons 65 or
older at lower income levels.
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Changes to Ad Valorem
Valuation of Homesteads.
Chapter 2021-31 (H.B. No. 7061)
made several changes to Florida Statutes regarding the ad valorem value of
homestead interests, principally:
1. Adding new exceptions to the rule that ad valorem
values are adjusted upon a change of ownership when the change or transfer is
the removal from the title of a co-tenant holding title by joint tenancy with right
of survivorship when the other co-tenants remain on the title. Such removal may
be by instrument or the death of the co-tenant.
2. Relating to adjustments in
value of damaged property.
3. Relating to adjustments in
value of voluntarily elevated property.
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Change to Fla.Stats. Section
719.103(25).
A change to this statute provides that a unit in a co-op is an interest in real property.
The effect of this change is that such units can now qualify as homestead property for all purposes under Article X, s.4 of the Florida Constitution. This resolves disparate results among courts and different provisions of Article X, s. 4 as to whether a co-op unit can qualify as homestead property.
