F.S. 9 Fla. Stat. For example, Abby, Ben, and Chuck own whiteacre as joint tenants with right of survivorship. Typically, tenancy by the entireties property will be titled as “Fred Jones and Martha Jones, husband and wife.” 12 While a couple Florida bankruptcy court cases have held that a remainder interest holder may be entitled to creditor protection, the argument does not apply to the homestead tax exemptions, and this is because homestead creditor protection and homestead tax exemptions are separate and distinct. 2d 727, 729 (Fla. 1969) ( quoting Anemaet v. Martin-Senour Co., 114 So. © 2020 The Florida Bar. Thus, the life estate holder has 100 percent of the current possessory interest permitting the life estate holder to use the entire exemption amount (provided, of course, it does not exceed the value of the property).11 The co-owner with the remainder interest would not be able to qualify for any homestead tax exemptions.12. The assessed value for ad valorem tax purposes will be $121,800: • Abby and Ben’s interest qualify for the homestead tax exemption; therefore, their interests receive the SOH tax cap and cannot be increased by more than three percent. X, §4(c). Email Disclaimer 3d 375 (Fla. 1978). • Bringing the Tax Exemptions Together — Whether property is titled as tenants by the entirety, joint tenants with right of survivorship, tenants in common, or a life estate, the co-owner who can qualify for the homestead tax exemption21 can also qualify to use some, if not all, of the $25,000 homestead tax exemption and Save Our Homes tax cap. Internet users and readers should not act upon this information without first seeking professional legal counsel. Pursuant to the Florida Constitution, in order to qualify for the homestead creditor exemption, three conditions must be satisfied: 1) acreage limitations, 2) residency requirements, and 3) ownership requirements.24 Provided all three of these conditions are satisfied, creditors of the person claiming the homestead creditor exemption will not be able to force sale of or place a lien on the homestead property.25 This article now examines how co-ownership of property affects the homestead creditor protection. 34, 34 (Oct. 2003). 2d 375 (Fla. 1978), the Florida Supreme Court held that the Florida “constitutional provisions allow the partition and forced sale of homestead property upon suit by one of the owners of that property” provided it is to protect the owner’s beneficial enjoyment.38 Thus, any of the co-owners of real property can force the property to be partitioned and sold.39 Therefore, if a co-owner does not qualify for the homestead creditor exemption, a creditor of that co-owner can acquire that interest and then force a sale.40 For example, assume Abby, Ben, and Chuck still have one-third interests in whiteacre as tenants in common, except now Abby no longer qualifies for the homestead creditor exemption. Instead, it restricts a person’s attempt to devise property he or she owns when homestead status has attached to that property.” Id. A Transfer on Death Deed allows for the execution of a present document whereby an owner can maintain possession and tax exemptions, avoid future probate, and retain the right to rescind at any time before death. 2d 1111, 1113 (Fla. 4th D.C.A. Co-ownership of property will not prevent an owner from claiming the homestead creditor exemption; however, the status of each co-owner impacts the level of creditor protection retained by the property. 2007); Crain v. Putnam, 687 So. Under this type of ownership, a person may take a life estate, which means he or she has a present possessory interest in the property and is entitled to all ordinary uses of the property until death.42 However, ordinary use does not permit a life tenant to do anything that injures the future interest in the property. 2d 1378, 1379 (Fla. 2d D.C.A. Fla. 1995) (“In absence of evidence to the contrary, co-tenants are presumed to [own] equal undivided interests”). It is important to understand that one co-owner qualifying for the homestead tax exemption can use the entire $25,000 exemption, but only if he or she possesses an interest that carries at least that value. Another form of joint tenancy is joint tenancy with right of survivorship (JTWROS). Once Abby’s creditors have her interest in whiteacre, they become co-owners with Ben and Chuck, and they can force a sale of the property.41 Until Abby qualifies for the homestead creditor exemption in whiteacre, Ben and Chuck will always be at risk. in taxation from the University of Florida Levin College of Law graduate tax program. Two of the three—joint tenancy and tenancy in the entireties—come with what is referred to as a “right of survivorship.” What that means is that, when one co-owner dies, the surviving owner automatically receives full, undivided ownership of the asset. This manner of ownership is commonly used among family members as a method to avoid probate, especially for smaller estates. 919, 942 (1988). This assessment shall change only as provided in this subsection. 2d 566, 569 (Fla. 5th D.C.A. 33 Fla. Stat. Can a Creditor Put a Lien on a Home That Is in Joint Tenancy?. Provided all three qualify for the homestead creditor exemption, whiteacre will be exempt from the individual creditors of Abby, Ben, and Chuck. JTWROS is a type of joint ownership in which two or more people hold title to an asset. When the life tenant qualifies for the homestead creditor exemption, the property is still protected from the life tenant’s creditors, but it is not safe from the remainderman’s creditors. 2d 23, 27 (1959)). b. • Life Estates and Remainder Interests — Individuals may also take title to property in a manner that divides ownership into present and future interests. 3D04-3070 (Fla. 3d D.C.A. art. ‘To inculcate in its members the principles of duty and service to the public, to improve the administration of justice, and to advance the science of jurisprudence.’ 15 Change of ownership is defined as “any sale, foreclosure, or transfer of legal title or beneficial title in equity to any person”; however, there are exceptions provided by law. Therefore, even though whiteacre is now worth $180,000, Abby, Ben, and Chuck would only be responsible for taxes on $92,700.17 W hen home values are skyrocketing, the SOH tax cap can save a significant amount of money on taxes. 2d 1110 (Fla. 4th D.C.A. art. Even if the others have their own homestead exemption, they can still get full homestead exemption. Conversely, co-owners of property titled as joint tenants with right of survivorship have a “unity of interest,” meaning their interests are identical in the property. Florida recognized tenancy by the entireties, which is a form of jointly titled property for husband and wife. To adopt [otherwise] would create two distinct definitions of homestead; one definition under subparagraphs (a) and (b) of section 4, and another definition under subparagraph (c) concerning the devise of the homestead.”). As for the remainderman, the devise and descent rules do not apply because the remainderman, under current Florida law, do not have a present possessory interest necessary to receive the homestead protections. 2008). §689.15 (2011) (unless it is a married couple acquiring property). 6 $60,000 (assessed value) minus $25,000 (tax exemption) = $35,000 taxable value. Home ownership is not limited to a single person or family. Example: “To Mark Wright and Bill Johnson, as joint tenants with right of survivorship.” The JTRS co-owners would each own overlapping 100% interests -- and any one owner filing for homestead would qualify for 100% of the homestead and SOH coverage. The Court held that “this language [in the Constitution] does not restrict the type of interests in real property a person may acquire or how a person may title his or her property. 1984). 3 Fla. Const. 34 (Oct. 2003). M.D. Florida Probate Lawyers at Adrian Philip Thomas, P.A. Joint Tenancy Survivorship Rights. See Fla. Stat. Transmission of the information in this web site is not intended to create, and receipt does not constitute, an attorney-client relationship. 4 Richard Franklin and Roi Baugher, Protecting and Preserving the Save Our Homes Cap, 77 Fla. B.J. 718, 719 (1912))); Vandiver v. Vincent, 139 So. art. 2008) ( quoting In re Levy, 185 B.R. X, §4(c) provides that: (c) The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child. The Florida Constitution does not restrict the type of property ownership required to qualify for the homestead exemption, only requiring that the property must be “owned by a natural person.”35 This is also supported by Florida case law, in which the courts have consistently stated that the ownership requirement under the Constitution should be expansively construed.36 Therefore, as long as a person has an ownership interest in the property, he or she will not be barred from claiming the homestead creditor exemption solely because the property is co-owned. 2002) (the constitution “does not designate how title to the property is to be held and it does not limit the estate that must be owned, i.e., fee simple, life estate, or some lesser interest”); see also Callava v. Feinbers, 864 So. 2) Blackacre has an assessed value of $60,000, and Chuck is the only co-owner who qualifies for the homestead tax exemption. Any co-owner of property held as tenants by the entirety, joint tenants with right of survivorship, or a life estate may use the entire amount of the $25,000 tax exemption and apply the SOH tax cap to the entire value of the property. • $25,000 Tax Exemption — Fla. Const. Instead, the co-owner’s interest in the transfer restricted homestead property must pass to his or her surviving spouse and/or minor child(ren) as designated by law. 8 Fla. Stat. There are three ways that multiple owners can hold title to Florida real estate: tenants in common, joint tenants with right of survivorship, and tenancy by the entirety. 21 Remember the remainderman cannot qualify for homestead and, therefore, cannot use the $25,000 tax exemption or the SOH tax cap. See Beal Bank, SSB v. Almand and Associates, 780 So. The results would be the same even if the three owned the property as joint tenants with right of survivorship. 37 Except for taxes and obligations arising from the purchase, improvement, repair, or labor related to the property. Right of Survivorship Under Florida law, when you add the words “right of survivorship” to a joint tenancy, that means full title to the real estate goes to the owner that survives the death of the other (s). Las Olas Square515 East Las Olas Blvd, Suite 1050Fort Lauderdale, FL 33301, inquiries@aptpa.comflorida-probate-lawyer.com. 2d 1018 (Fla. 2001) (demonstrating the far-reaching creditor protection). Both the trial court and the Second District Court of Appeals found that the property was not homestead property of Mr. DeRosa when it was jointly purchased with his mother, as Mr. DeRosa’s property interest ceased upon his demise, and his mother, Harriet, became the sole owner of the property. They might be related or unrelated. 2d 1325, 1326 (Fla. 4th D.C.A. However, anytime there is a “change of ownership,”15 the property must be assessed at just value the following January.16 In addressing the application of the SOH tax cap to co-owned property, F.S. ~ From the Rules Regulating The Florida Bar, The American Influence on International Commercial Arbitration: Doctrinal Developments and Discovery Methods. §193.155(3)(a) (2011), such as by operation of law under Fla. Stat. Read 1 Answer from lawyers to Changing deed to Joint Tenants with right of survivorship (homestead defaults to Tenants in common since not specified). X, §4, which states: (a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, filed or other labor performed on the realty, the following property owned by a natural person: (1) a homestead, if located outside the municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family. The article now examines how these rules apply to a co-owner of property where he or she owns transfer restricted homestead property. In order to answer this question, there are two issues that need to be addressed: 1) whether a person with a fractional ownership can claim the homestead creditor exemption, and 2) which of the co-owners qualify for the homestead creditor exemption, and which, if any, do not. • Devise and Descent, Tenants by the Entirety — The rules regarding devise and descent of transfer restricted homestead property do not apply to property owned as tenants by the entirety.56 T his is because at the death of one spouse, property owned as tenants by the entirety passes to the surviving spouse automatically, outside of probate — therefore, there is no devise or descent of the homestead property. Chuck would each receive one-third of the first spouse, the interest of joint. The legal title to the title of property ownership defined as jointly owned marital property with.. 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