What Happens To Homestead Property, In Probate Court?

Florida is unique amongst many states in that it completely protects your homestead property from creditors. Absent you giving permission for your home to be taken (such as when you take out a mortgage or buy property subject to a homeowners association lien), if a judgment is ever entered against you, your homestead property can never be taken to pay off the debt (it can be liened, but not taken by a foreclosure).

What About in Probate?

But that is homestead property. When you pass, you are no longer the owner of the property. Your beneficiaries or your estate are.

So what then? Can a creditor to your estate now make a claim on the value of what was formerly your homestead—or does your homestead maintain its protected status, even after you are no longer alive?

The good news is that Florida’s homestead protections outlast your passing. Homestead status remains, even during probate, and even when your designated beneficiaries take control or ownership of the property. Creditors in probate can make claims on other parts of your estate, but not the value of, or equity in, homestead property.

Designation of Homestead

To have and keep this protection, the probate court must establish that the property is, in fact, homestead.

Of course, having the property registered as homestead can make this easier, but even if there is no official designation of homestead (which will likely lead creditors to contest the homestead status), with the right proof before the probate court, the probate court can still designate property as homestead.

Another reason a probate court designation is important is that many title companies will require that designation. Without it, your heir or beneficiaries may have a hard time selling the property, if that’s what they want to do, as any sale will require title insurance.

Exceptions

One other exception: Your heirs must inherit the property to maintain homestead property. Giving homestead property to a business, a trust, or a non-relative could risk loss of the homestead status (which may not be an issue if your estate has no creditors).

One thing to remember about when property is designated as homestead in probate, is that your spouse and kids will end up inheriting the property, a legal right that will take precedence over anything to the contrary that you may put into your estate documents. In many cases, this isn’t a problem, but in some cases, it can be.

For example, imagine someone who is not legally divorced, but is separated from a spouse. That spouse will inherit the homestead property, even if your estate documents leave it to someone else. This is one reason couples who are long separated should make the divorce legal, for estate planning and probate purposes.

We understand the probate process and how it affects your family and property. Contact the Tampa real estate lawyers at the Gilbert Garcia Group, P.A. today.

Sources:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0732/Sections/0732.4015.html

marinatitle.com/homestead-protections-surviving-spouses-minor-children/