OWNERSHIP OF REAL PROPERTY IN FLORIDA

Title to Real Property

Real property – which includes land and buildings – can be owned (titled) in a variety of ways in the state of Florida:

• Individually
• Joint Tenant
• Joint Tenant with Right of Survivorship
• Tenancy by the Entireties
• Revocable Trust
• Irrevocable Trust

Owning real property individually means there is one owner of record listed on the recorded deed - and with the respective property appraiser in the county where the property is located. Individually owned property may be transferred by estate planning documents (last will and testament, deed (quitclaim deed, special warranty deed, warranty deed, or life estate/enhanced life estate deed[i]), or a revocable or irrevocable trust. Upon the death of the owner without a will (i.e., intestate) or a trust, such individually owned property will pass to the natural heirs of the decedent.

Owning real property as a joint tenant means there are two or more owners with equal percentages of ownership. Each owner may sell or bequeath his/her share of the property, without the consent of the other owner(s). Such share owned by a joint tenant will pass to the natural heirs of the decedent without a will or trust in place. The person(s) who inherit (or purchase) such share will become a joint tenant with the surviving joint tenant(s).

Another form of joint tenancy includes specific “with right of survivorship” language in the deed which means upon the death of one of the joint tenants, his/her share will automatically pass to the surviving joint tenant(s). There is no need to prepare and record a deed or other transfer documents.

Even if not specifically indicated on a deed, Florida law assumes that residential property owned by a married couple is titled to them as “tenants by the entireties,” which means that when one spouse dies, the other automatically takes full title to the property, just like how property held as joint tenants with right of survivorship passes. When the second spouse passes away, the property will pass to the second spouse’s heirs (or to whomever is named in a will or trust). Tenancy by the entireties is specifically restricted to married couples. Note, heirs of the first spouse who died are left out unless the second spouse provides for them in estate planning documents or other means. To avoid disinheriting heirs – either intentionally or unintentionally – the married spouses could transfer the homestead into a living trust naming them both as beneficiaries.

Property held in a trust is in the name of a trustee rather than in the name(s) of the individual(s). A trust may be revocable (meaning that the grantor (the person making the trust) can revise or terminate the trust during his/her lifetime) or irrevocable (meaning the grantor generally cannot revise or terminate the trust). The trustee is the owner of the property rather than the individual person(s). The trust document may specify how or to whom property is conveyed upon the death of the grantor (or upon the death of the surviving grantor if more than one).

Florida Homestead

Residential property in Florida held by an owner who also lives in the property at least six months and one day (per year) is considered “homestead” property. Upon the death of an owner of homesteaded property who is survived by a spouse or minor children from a current or former relationship, such property shall descend according to Florida statutes, even if the decedent had a will transferring the property differently. Both a surviving spouse and minor children are assumed to receive an interest in the homestead. Such property would be transferred to a minor child or children first, even if there is a surviving spouse of the decedent. If there are no children, the homestead property would go to the spouse.

Protection of Real Property

The Florida Constitution and Florida statutes also provide added protection to homestead property. Generally, real property may be subject to forced sale to pay a judgment creditor (as a result of bankruptcy, accident, etc.). However, homesteaded property is exempt from such forced sale. A married owner cannot mortgage, sell, or gift the homestead to anyone other than his/her spouse or to themself and his/her spouse, unless the spouse signs a deed or mortgage.

In addition to the homestead benefit regarding no forced sale, Florida provides a “homestead exemption” for property taxes. A Florida homeowner who makes the property his or her permanent residence or the permanent residence of his or her dependent may be eligible to receive a homestead exemption up to $50,000 (first $25,000 applies to all property taxes, including school district taxes; additional exemption up to $25,000 applies to the assessed value between $50,000 and $75,000 and only to non-school taxes).

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[i] Also known as a Lady Bird Deed, the Enhanced Life Estate Deed is a special type of deed recognized only in Florida, Michigan, and Texas. In and advanced life estate deed, the life tenant maintains complete control over the subject property for their lifetime. Therefore, the life estate holder can mortgage, lease, rent, or sell the property without needing the consent of the remaindermen named in the deed.