Archive for September, 2010
MAJOR CHANGE COMING TO FLORIDA’S HOMESTEAD LAW
A major change in Florida’s homestead law becomes effective October 1, 2010. This change is particularly significant to “blended” families.
For example, Widower Bob has two adult children, Biff and Rock, lives in and owns his home valued at $500,000, free and clear. Bob then meets and marries Goldie Digger who moves into the house with him. Biff and Rock are none to happy about this marriage. Sometime thereafter, Widower Bob dies without having prepared an estate plan.
Under the present law, Goldie, as Bob’s surviving spouse, would be legally entitled to a life estate in the homestead, meaning that she could live in that house for as long as she wished. However, if she ever decided to move out of the house, or upon her death, the house (remainder interest) would belong equally to the two children. While living in the house, Goldie would be under a legal obligation to pay real estate taxes, keep the house insured, and keep it in a reasonable condition for the sons. Under present law, Goldie would have no ownership interest, no right to sell the home or to receive any proceeds from the sale of the home.
However, circumstances change dramatically under the new law. Effective October 1, 2010, in lieu of a life estate, the surviving spouse (Goldie) may elect to take an undivided one-half interest in the homestead as a tenant in common, with the remaining undivided one-half interest vesting in the decedent’s descendants in being at the time of the decedent’s death (Biff and Rock). Unlike the previous law, Goldie now may elect to take an immediate one-half ownership interest in the property, thereby entitling her (if she chooses) to force a partition and sale of the property and pocket her $250,000 share of the proceeds. The right to an immediate ownership interest in the property with the resulting ability to force a sale of the property is a major, major change.
Effective October 1, 2010, if Widower Bob wants to leave that homestead to Biff and Rock, he will need to either execute estate planning documents, which specifically limit Goldie to receiving a life estate, or else execute a prenuptial or post-nuptial agreement (which may limit her even further). Although this new law affects many families, it is particularly important in situations involving second (or 3rd, 4th, or 5th) marriages. In our experience, relations between the surviving spouse (Goldie) and the children from a previous marriage (Biff and Rock) is most often hostile (to say the least).
If you are in a second marriage, if your parents or grandparents are in a second marriage or if you have relatives or close friends in that situation, the Florida legislature now has provided an added reason to consider meeting with your favorite estate planning attorney to prepare an effective estate plan that will make sure your wishes are met and preserve as much harmony as possible between your children and their “step” parent.