I.WHAT IS HOMESTEAD?
1.HOMESTEAD GENERALLY: Homestead is the real property owned by a Florida resident which is used as his or her primary residence, as distinguished from a vacation residence. To constitute homestead, the owner must possess the actual intent to reside permanently in one’s homestead, coupled with actual use and occupancy. The term “permanent” means for an indefinite period of time. See,In re: Randall E. Gentry, 23 Fla. L. Weekly Fed. B179 (Bankr. M.D. Fla. 11/15/11).
The homestead character of the property is not abandoned when the owner involuntarily changes his residence, as in a case where an infirmity requires residence in a nursing home or hospital facility.”See, Crain v. Putnam, 687 So. 2d 1325 (Fla. 4th DCA 1997), citing, In re Estate of Melisi, 440 So. 2d 584 (Fla. 4th DCA 1983). Similarly, inNelson v. Hainlin, 89 Fla. 356, 104 So. 589 (Fla. 1925), the Florida Supreme Court held that the fact that the husband had spent the “latter years” of his life away from the homestead, so that he could be cared for in a neighbor’s home and his daughter’s home, did not destroy the homestead nature of the property for purposes of devise. See also, Stokes v. Whidden, 97 Fla. 1057, 122 So. 566 (Fla. 1929) (property was still homestead after husband had become insane and had remained in a state institution).
There are three contexts in which the homestead has significance in Florida law: (A) exemptions from real estate taxes, (B) exemptions from forced sale, and (C) restrictions on descent and devise.
(A) EXEMPTIONS FROM REAL ESTATE TAXES.
Pursuant to Article VII, Section 6, Florida Constitution and §§196.031, 196.071, 196.075 and 196.081, F.S., the following exemptions may apply:
(a) The first and third $25,000 of the assessed valuation are exempt on all homesteads;
(b) In accordance with s. 6(d), Art. VII of the State Constitution, the board of county commissioners of any county or the governing authority of any municipality may adopt an ordinance to allow either or both of the following additional homestead exemptions: (a) Up to $50,000 for any person who has the legal or equitable title to real estate and maintains thereon the permanent residence of the owner, who has attained age 65, and whose household income does not exceed $20,000; or (b) The amount of the assessed value of the property for any person who has the legal or equitable title to real estate with a just value less than $ 250,000 and has maintained thereon the permanent residence of the owner for at least 25 years, who has attained age 65, and whose household income does not exceed certain income limitations.
(c)There is a tax exemption for the homesteads of all partially or totally permanently disabled veterans who are 65 years or older, were honorably discharged, and were residents of the State of Florida at the time of entering military service if the disability was combat related. The discount is in a percentage equal to the veteran’s disability; and
(d)There is a total exemption of the homestead of a surviving spouse of a veteran who died from service-connected causes while on active duty if the veteran was a permanent resident of Florida on January 1 of the year of death.
(B) EXEMPTIONS FROM FORCED SALE. This exemption from forced sale applies to homesteads of up to 160 acres of contiguous land outside of a municipality and up to one-half acre of contiguous land located within a municipality. The exemption on a homestead within a municipality is limited to that part used as the residence of the owner or the owner’s family. The homestead outside of a municipality applies to the entire property that the owner or the owner’s family lives on. These exemptions are not only to the owner but to the surviving spouse or heirs of the owner. (Article X, Section 4(a), Florida Constitution.)
(C) RESTRICTIONS ON DESCENT AND DEVISE. The individual’s homestead cannot be devised by will if he or she is survived by a spouse or minor child, although it can be devised to the owner’s spouse if there is not a minor child. The owner cannot convey or mortgage his or her homestead without the spouse’s signature. See, Article X, Section 4(c), Florida Constitution.
The constitution restricts the devise of homestead but does not address how the restricted homestead descends upon the death of the owner. These restrictions are provided for in §732.401(1), F.S. which states that it descends like any other intestate property unless the decedent is survived by a spouse and one or more descendants, in which case the spouse takes a life estate and the reminder goes to the descendants. In 2010, the legislature added §732.401(2), F.S. which allows the surviving spouse to elect to take an undivided one-half interest in the restricted homestead with the other one-half going to the descendants.
II. WHY DO WE HAVE HOMESTEAD PROTECTIONS? There are public policies in Florida to protect the home for the benefit of families, the elderly poor and disabled veterans and their widows.
The tax exemptions reduce the chance of someone being taxed out of their home. This can be somewhat circumvented by local government’s use of special assessments for fire protection, drainage districts, hospital districts, etc., which assessments are not reduced by the exemptions;
The exemption from forced sale keeps the family from losing their home to a creditor, unless they have agreed that it stands as security for the debt, such as in a mortgage or an improvement lien or for taxes and assessments. This exemption is used by some debtors to shelter their non-exempt funds from their general creditors; and
The descent and devise provision keeps the home from being willed to a non-spouse, leaving the spouse and children without a home, or cutting the child or spouse out of a share of the home in the case of intestate succession. This could potentially be misused by a second spouse who gets the life estate and then “kicks the decedent’s minor children to the curb.”