Can I Transfer My Florida Homestead into a Living Trust?
Many Florida residents wish to transfer their Florida homestead into a living trust, either a revocable grantor trust or an irrevocable GRIT. This is a complicated question, the answer to which may be "yes," "no," or "maybe!" Many popular books have been written about living trusts, and they state that a home can be transferred to the trustee of a living trust. Authors who are unaware of the Florida Homestead Law, however, write these books. Most Florida title insurance companies and Florida licensed real estate attorneys will question the validity of the title to the real estate if it is conveyed to the trustee of a living trust.
The Florida Constitution contains a "homestead law" which says that on death the Florida homestead can pass to only one person: a surviving spouse, if the homestead owner died with a spouse. The same Constitutional provision says that if the homestead owner died survived by a minor child, the homestead cannot be willed at all, not even to the spouse. These provisions are designed to keep a roof over the head of a surviving spouse and small children. While these are worthwhile objectives, these provisions also complicate the wishes of Florida residents to transfer their homesteads into living trusts. The Florida Supreme Court has declared the transfer of a Florida homestead to a trust to void if there is a surviving spouse and the spouse does not end up owning the home, or it the homestead owner had a minor child, in which case the transfer of the home after death through the trust is unquestionably "void."
Therefore, the problem is that if you transfer your homestead to a living trust, title examiners cannot tell if there was a spouse or minor child who was circumvented and denied their homestead rights upon the death of the homestead owner. There is no "proceeding" at the courthouse to demonstrate in the public records that the homestead rights of a spouse or minor child were protected. Part of any "probate" proceeding is to declare the homestead rights of all parties interested in the homestead. There are no "probate" proceedings in connection with the administration of a living trust. Nevertheless, in certain circumstances, it may be appropriate to transfer the homestead to a living trust, such as a homestead owned by a widow or widower (who has no plans to remarry!) who has no minor child, or a homestead owned by a married couple, with no minor child, who have signed a prenuptial or postnuptial agreement waiving their homestead rights. Still, it will be necessary to demonstrate after the death of the homestead owner that there was not a minor child surviving the homestead owner or that there was no surviving spouse or a surviving spouse who has waived his or her homestead rights in a valid prenuptial or postnuptial agreement.
This can usually be accomplished with inexpensive and simple probate procedures available under Florida law. Most title companies require this to be demonstrated with an order of a court and they will not settle for a mere affidavit in the public records. This means that some probate proceeding may be necessary even if the homestead is conveyed to the trustee of a living trust. Therefore, the transfer a homestead to the trustee of a revocable living trust is a complicated question that should be done only after a thorough review of the facts of each individual case. If the homestead is transferred to the trustee of a living trust, after the death of the homestead owner, a title company will ask your heirs to prove, with the order of a court or perhaps only an affidavit, that the homestead owner did not have a surviving spouse or a minor child, because if he did make a "testamentary disposition" through the living trust, the transfer may be considered void because it circumvents the Florida Constitution's provisions designed to keep the homestead for the use and benefit of the surviving spouse and minor child. (In re: the Estate of Johnson, 397 So.2d 971 (FIa. 4th DCA 1981; Ford v. Ford, 501 So.2d 203 (Fla. 5th DCA 1991)).
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