Over 300,000 new people became Florida residents in 2017, continuing a growth trend that shows no signs of slowing. With the new tax act squeezing many residents of high tax states in the northeast, the trend of continued population growth in the sunshine state is only expected to rise in 2018. Many new residents purchase new homes or convert their previous vacation or second homes in Florida into their primary residence. If this purchase or conversion is completed by December 31, those new residents may be eligible to apply for a Florida Homestead Exemption the following year.
Florida has two types of homestead:
The first is set forth in the Florida Constitution under Article X, Section 4, which is an automatic provision to protect homeowners from claims of creditors or spouses who exclusively hold title, and to insure that a surviving spouse is not made homeless. This protection is automatic based upon purchasing a house, condominium or cooperative and making it your primary residence.
The second form of homestead is known as the Homestead Exemption, and it is also set forth in the Florida Constitution under Article VII, Section 6, which provides a financial exemption from real property taxation of up to $50,000 in home value. Additional exemptions are available for veterans over 65, low income senior citizens, surviving spouses of a veteran or first responder that died in the line of duty, and certain disabled persons.
After more than 30 years of concentrating my legal practice in real estate matters, below is a brief listing of common mistakes I repeatedly see. Read below and find out how a few quick fixes can save you time, money and headaches.
Deeds Without Estate Status:
You want to add dad, mom or a sibling to your Florida property, so you get a Quit Claim Deed from an out-of-state lawyer, an office supply store or online, fill it out and mail it in to be recorded. Three years later they die, and when you go to sell the property you discover that in order to clear their interest, you need to file an ancillary administration in Florida. An easy fix could have saved you $3,000 and a few months of time. You eventually close and share the proceeds with their heirs, however this can be avoided by using the proper language on the deed. If you want the property to go to everyone’s heirs, do nothing, but if you want to be sure that the property goes to the surviving grantees, simply add, “joint tenants with full rights of survivorship, and not as tenants in common” after the grantee’s name. Upon their death, the title goes to the remaining grantee without probate.
If you own a second home/condominium in Florida and are a resident of another state, you can avoid two probates by simply deeding your second Florida property to yourself for life with a remainder to your chosen heirs. Then, when you die, no probate is necessary. You can even keep full control of your property by adding Ladybird Powers to your Life Estate Deed, which means you can sell or mortgage your property without your remainderman’s (person who inherts property) consent. Continue reading →