Homestead

A Will seems simple, but when executed, it can be a rocky road

January 10, 2018 | by Chepenik Trushin LLP

How to comply with formal requirements of Will execution

Florida law places great emphasis on compliance with its statutes regarding execution of wills. This is to assure the authenticity of such an important document profoundly affecting many lives, and prevent fraud and imposition in its execution. The statutory provisions, which appear in Florida Statute §735.502, set out four main requirements for executing a will. Failure to comply with the formal requirements can invalidate the will and force the estate to pass through intestate succession. It is therefore important to comply with and understand these formal requirements.

Firstly, the will must be in writing. This means that the document can be handwritten, typed, or printed. Florida does not recognize oral wills (nuncupative wills) or wills without witnesses (holographic wills). Nuncupative wills are allowed in only few jurisdictions and typically require witnesses and some exigent circumstances such as a car accident or a heart attack. Contrarily, many states recognize holographic wills and have different requirements as to their validity.

Ademption, knowing what is not part of your estate

December 26, 2017 | by Chepenik Trushin LLP

When devises are actually not part of the estate

Many unexpected things can happen in the period between the execution of a will and the actual death. For example, a decedent may devise the family house in Key West to her granddaughter. Several years after executing the will, the decedent gets into financial troubles and sells the Key West house. With other matters on her mind, the decedent never gets to adjust the will and passes away. Does the granddaughter still have a right to the house? Does she get money instead? Does she get any value at all?

The legal term describing a situation when a particular asset devised in the will is not part of the estate is ademption by extinction. The Florida statutes cover ademption in Section 732.606 for specific devises, and Section 732.605 for securities. Ademption is not uncommon; the decedent may have owned the asset and later sold it, or could have never owned it all. The situation would be different if the grandmother gave the granddaughter the Key West house as a gift before passing away. In that case, the granddaughter’s devise would have been satisfied during the grandmother’s lifetime. Accordingly, this legal concept is called ademption by satisfaction and is not discussed in this blog post.

Will Florida raise the Homestead Exemption in 2018, a reader’s guide before you vote.

November 14, 2017 | by Chepenik Trushin LLP

Expanding Florida’s Homestead Exemption

Florida voters will have an important decision to make for the 2018 election—whether to raise the Florida homestead exemption. At first glance, the legislation offers a substantial property tax break for homeowners; however, if approved, the homestead exemption bill may cost counties and cities enormous revenue.

The Florida legislature created the homestead exemption in 1934 to aid residents affected by the Depression. The homestead exemption—then $5,000.00—allowed residents to keep their homes despite inability to pay property taxes. http://www.tampabay.com/news/politics/legislature/florida-homestead-exemption-increase-closer-to-ballot/2322311. In 1980, under Democratic Governor Bob Graham, Florida voters raised the exemption to $25,000.00, and again in 2008 to $50,000.00 under Republican Governor Charlie Crist. http://www.tampabay.com/news/politics/legislature/florida-homestead-exemption-increase-closer-to-ballot/2322311. Now, the November 2018 ballot will give Florida voters the choice to raise the exemption even higher.

May 2017 District Court of Appeals decision impacts Alimony creditors – a blend of family law and estate planning law

August 21, 2017 | by Chepenik Trushin LLP

4^th DCA Recognizes Homestead Exception for Alimony Creditors

The Florida Constitution provides powerful homestead protection against creditors. Generally, only three types of super-creditors can breach this protection – (1) government entities with a tax lien or assessment on the property; (2) banks or other lenders with a mortgage originating from the purchase of the property; and (3) creditors with liens originating from work or repair performed on the property.

However, a recent decision by the District Court of Appeal for the 4^th District confirmed a “long recognized” fourth category of super-creditors – alimony creditors. The facts of this case are as follows: Robert Spector (“Husband”) and Renee Spector (“Former Wife”) divorced in 1996, and agreed in a post-nuptial agreement that Husband would (1) pay Former Wife $5,000 per month in alimony until his or her death, or until she remarried; (2) transfer to Former Wife the title and interest in their marital home; and (3) maintain a $750,000.00 life insurance policy for Former Wife’s benefit. Subsequently, Husband was held in civil contempt for “willful and deliberate failure to comply with the alimony provisions” of the post-nuptial agreement and was also denied a bankruptcy petition as alimony arrearages were not subject to bankruptcy discharge.

Use of Homestead Property and the impact on estate administration

May 8, 2017 | by Chepenik Trushin LLP

The importance of a Semicolon – Does property partially used as primary residence and partially for business purposes qualify as Homestead?

Does property partially used as primary residence and partially for business purposes qualify as homestead under Article X, Section 4 of the Florida Constitution? Surprisingly, the answer apparently rests on a semicolon.

This question was addressed in 2003 by the Florida Court of Appeal for the First District in Davis v. Davis, 864 So. 2d 458 (Fla. 1st DCA 2003). The facts of this case are as follows: Mr. Horace Davis lived with his wife Carolyn on a contiguous piece of property measuring less than 160 acres outside of municipality in an unincorporated portion of Nassau County. The property included the couple’s residence and on a portion separate from the residence, Mr. Davis operated a mobile home park generating profit through rent. Mr. Davis died in 2000 having written a will.

Homestead sale profits in Florida, a recent court decision

April 21, 2017 | by Chepenik Trushin LLP

Is Investing Homestead Sale Proceeds Okay?

Florida Constitution provides protection from forced sale to homestead property from most creditors. Art. X, § 4, Fla. Const. The protection covers not only the physical homestead property but also the proceeds from the sale of the homestead, provided the proceeds are reinvested in another homestead property. In a scenario where you invest the homestead sale money in securities and then buy another homestead with it, does the money retain homestead protection?

The Florida Supreme Court answered this question in the affirmative in a recent 2016 decision JBK Assocs. v. Sill Bros., 191 So. 3d 879 (Fla. 2016). In that case, JBK Associates, Inc. (“JBK”) obtained a final judgment against Mr. Sill for $740,487.22. Mr. Sill had consequently opened a brokerage account with Wels Fargo and deposited the sale proceeds from the marital home of Mr. Sill and his ex-wife. The account was titled “FL Homestead Account” and was split into three sub-accounts, one containing cash and two containing mutual funds and unit investment trusts.

Homestead protection in Florida

March 28, 2017 | by Chepenik Trushin LLP

Is Investing Homestead Sale Proceeds Okay?

Florida Constitution provides protection from forced sale to homestead property from most creditors. Art. X, § 4, Fla. Const. The protection covers not only the physical homestead property but also the proceeds from the sale of the homestead, provided the proceeds are reinvested in another homestead property. In a scenario where you invest the homestead sale money in securities and then buy another homestead with it, does the money retain homestead protection?

The Florida Supreme Court answered this question in the affirmative in a recent 2016 decision JBK Assocs. v. Sill Bros., 191 So. 3d 879 (Fla. 2016). In that case, JBK Associates, Inc. (“JBK”) obtained a final judgment against Mr. Sill for $740,487.22. Mr. Sill had consequently opened a brokerage account with Wels Fargo and deposited the sale proceeds from the marital home of Mr. Sill and his ex-wife. The account was titled “FL Homestead Account” and was split into three sub-accounts, one containing cash and two containing mutual funds and unit investment trusts.