Homestead… Red, Yellow or Green?

The concept of Florida homestead is one of the most difficult, if not one of the most important concepts to understand in estate planning. It has been called the legal chameleon because of the changing definitions of homestead depending on the context you are using the term “homestead”.

One way to think of the homestead chameleon is red, yellow and green as on a stoplight. The red is the ability of homestead to stop creditors, the yellow is the caution that you must have regarding descent and devise of homestead at death and the green is to make sure the homestead owner affirmatively confirms homestead status to obtain the favorable real estate tax exemption and save our home cap.

In the recent case of Lindsay Ballard, as personal representative, v. Pritchard and Williams, the court determined that the homestead was improperly devised under Florida law and the yellow caution light was not considered while drafting the decedent’s Last Will and Testament (the “Will”).

1. Decedent died on 2.17.2002 owning a homestead. She devised her homestead, life estate to husband, remainder to one of her 2 adult children, Ron. The remainder of her estate was distributed in equal shares to Ron and her other son, Robert.

2. Decedent’s son, Robert, died 2.8.17 with Lindsey Ballard as his sole heir. Robert is the son that did NOT receive any part of the homestead in the Decedent’s Will.

3. Decedent’s husband died on 2.24.2019.

4. May, 2020 (12 years AFTER the mother’s death and about a year after spouse’s death) Ron (the son who received the homestead after spouse’s death pursuant to  Decedent’s Will) filed a petition of summary administration for Decedent’s estate only as to the homestead.

5. June, 2020 Ballard (Robert’s representative) filed a petition to determine homestead alleging on the date of Decedent’s death in 2002, the homestead was distributed life estate to spouse and remainder to BOTH Ron and Robert because the homestead was invalidly devised under Decedent’s Will.

6.Ron argued that, because the life estate was affirmatively devised to husband, the devise to him was valid. He also argued that, because the spouse never objected nor complained, that any objection to Decedent’s Will was waived.

7. The lower court found for Ron determining the homestead was distributed life estate to spouse, remainder to Ron. Ron then distributed, by quit claim deed, the homestead to his children, Kristen and Kevin. Ron died in 2020.

8. Lindsey (the sole heir of Robert) appealed and the court substituted Kristen and Kevin for Ron.

9. The appellate court looked to the Florida Constitution which provides that homestead is NOT “subject to devise if the owner is survived by a spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child.” (emphasis added).

10. If a devise of homestead is invalid, then Florida law requires the homestead descend as provided in the intestate succession statute.

11. The appellate court then cited the Finch decision. When “a testator dies leaving a surviving spouse and adult children, the property may not be devised by leaving less than a fee simple interest to the surviving spouse”.

12. The appellate court also determined that “equitable principles such as waiver or estoppel” can not nullify a homestead interest.

13. Thus, the homestead was improperly devised by the Decedent (the homestead did not go OUTRIGHT in fee simple to the spouse as provided in the Florida Constitution), the devise of homestead was invalid and descended as provided in the intestacy law- to BOTH children, Ron and Robert.

ADVICE:  Homestead will continue to be a nemesis in the world of estate planning and probate. Unfortunately, as in this case, many instances of determining title will not arise until after the spouse of the decedent has died.  Do a flowchart of the dates and the descent. Also a must in this area.. Rohan Kelley’s homestead paradigm.

WORD OF THE WEEK:  Descent vs. Devise vs. Distribution…Descent is the acquisition of real property by heirs by intestacy (there is no will). In the 1800s there were 2 different statutes. The Statute of Descents applied to real property descending to heirs under the intestate law. The Statute of Distributions applied to personal property distributed to heirs under the intestate law. Blacks law dictionary states that “the rules of descent and distribution make a disposition of the property which …the average man would provide were he to make a will.” Today, such theory is provided in the intestacy statutes.

Devise is the term for giving property by a will although it generally refers to gifts of real property. In Britain, the term still only applies to real property but in the United States that term has broadened to include both real and personal property. However, many attorneys, including this author, use the term “devise” to refer to real property.

Obviously these terms have “morphed” over the years to be interchangeable but it is helpful to know the distinctions.

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