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Exemption denial and Trusts

Author greg biehl
Participant 

#1 - Posted: 8 May 2013 15:01 
In 1992 my brother created a trust for my mom in 1994, then she died...he thought the trust could hold an exemption, 17 years later the broward co property appraiser sent me a bill for $52,000.00 dollars . I think a trust and a quit claim deed recorded in broward county in 1992 is a change in ownership and there should have been a problem with the exemption then not in 1994. Does any one know the law for trusts and exemptions in 1992?

Author johnbsims3
Admin 

#2 - Posted: 9 May 2013 04:57 
Greg, The trust can claim the exemption. The issue becomes did the trustee remain in the property? I'd like to know the citation of law they rely on. Feel free to contact us at 954 - 252 - 9111

Author greg biehl
Participant 

#3 - Posted: 9 May 2013 12:21 
when my mom died in 1994 my brother became the trustee and beneficiary,he did not live here i did but on july 18 1997 he made me the successor trustee ,this doc was not recorded in broward county but the bcpa was made aware of it when i claimed an exemption july 27 2011,using a certificate of trust made by my brother for some reason they did not accept the addendum no.1 making me the seccessor trustee. there point of view is we did not file for a new exemption in 1994. the notice to file lien says OWNER IS DECEASED and sites section 196.011......i need to know what was a change ownership in 1992 as home stead law was changed in 1992 or 1993 , when i talked to bcpa legal he said the trust joanna biehl to joanna biehl tr is not a change of ownership because the name is the same., my point of view is since the trust and deed were recorded in broward co the bcpa was informed of the change of ownership ,after all if a deed is not a change of ownership then what is .....

Author johnbsims3
Admin 

#4 - Posted: 10 May 2013 12:59 
I don't understand why the property appraiser would not accept an addendum. It's possible that a new exemption application was not filed and therefore the new trustee would not have been able to claim it. The property appraiser is correct. There would be no change of ownership in regards to the trust. Apparently it is the trust that had the exemption, not the owner. In my opinion you should file an appeal with the value adjustment board in an attempt to reverse this nightmare. If we can be of assistance please do not hesitate to contact us.

Author greg biehl
Participant 

#5 - Posted: 14 May 2013 11:23 
update..... 2 years and 40,000 dollars later we had to pay the lien to protect the equity in the house, the last two years i filled a petition for assesed value and a magistrate reduced it 40 percent or 70,000, i live next to the worst code violater in broward co for 20 years , since the lien amount was baised on market value and i have proven this house has been over assesed for 20 years , can i contest the lien in this way or any other way........thank you

Author johnbsims3
Admin 

#6 - Posted: 14 May 2013 18:24 
Yes. The deadline is Sept 18. You must file a petition with the county value adjustment board.

Author greg biehl
Participant 

#7 - Posted: 30 May 2013 11:34 
i am confused the bcpa said a trust is not a natural person and can not hold a exemption , my exemption was joanna biehl tr but was removed because joanna biehl the person died.....can you tell me what fla statutes you are refering to.......

Author johnbsims3
Admin 

#8 - Posted: 31 May 2013 03:57 
Fla. Administrative Code 12D-7.011 Homestead Exemptions - Trusts. The beneficiary of a passive or active trust has equitable title to real property if he is entitled to the use and occupancy of such property under the terms of trust; therefore, he has sufficient title to claim homestead exemption. AGO 90-70. Homestead tax exemption may not be based upon residence of a beneficiary under a trust instrument which vests no present possessory right in such beneficiary.

Specific Authority Florida Statutes 195.027(1), 213.06(1) FS. Law Implemented 196.001, 196.031, 196.041, 213.05 FS. history-New 10-12-76, Formerly 12D-7.011, Amended 2-25-96.

Author johnbsims3
Admin 

#9 - Posted: 31 May 2013 03:58 
Florida Attorney General
Advisory Legal Opinion
Number: AGO 90-70
Date: August 22, 1990
Subject: Homestead tax exemption
________________________________________



Mr. George Ralph Miller
Attorney for the Property
Appraiser of Walton County
Post Office Box 687
DeFuniak Springs, Florida 32433

RE: PROPERTY APPRAISERS--TAXATION--HOMESTEAD EXEMPTION--
trust beneficiary with present possessory life
interest in real property who makes property his
permanent home entitled to homestead tax exemption.

Dear Mr. Miller:

You have asked on behalf of the Property Appraiser's Office
of Walton County substantially the following question:

Is the property appraiser authorized to allow a homestead
tax exemption pursuant to s. 6, Art. VII, State Const., on
a home placed in an inter vivos trust by one who is a co-
beneficiary of the trust and who resides on the property?

In sum, I am of the opinion that:

Because the trust in question grants the beneficiary a
present possessory interest for life, and the beneficiary
makes the real estate comprising the corpus of the trust
his permanent home, a sufficient equitable title to real
estate is established to support the allowance of a home-
stead tax exemption.

According to your letter, the following are provisions of
the trust: (1) The settlor and settlor's wife, for as long
as at least one of them is living, shall have the continuous
present right to full use, occupancy and possession of the
homestead; and (2) The trustee shall have no power,
authority or duty with respect to the homestead until such
time as the settlor otherwise directs in writing, revokes
this trust agreement, or settlor and settlor's wife are
both deceased, whichever shall first occur.

I understand from your letter that the beneficiary of the
intervivos trust makes his permanent residence on the
property and has a present possessory interest for life,
with legal title being in the trustee.

Under the Constitution of the State of Florida, a homestead
exemption is granted to "[e]very person who has the legal
or equitable title to real estate and maintains thereon the
permanent residence of the owner, or another legally or
naturally dependent upon the owner . . . ."[1] This
constitutional provision states that "[t]he real estate
may be held by legal or equitable title, by the entireties,
jointly, [o]r in common . . . ."

Based on the information you have provided it appears that
the beneficiary does not have legal title, and will, there-
fore, be entitled to the homestead exemption only if he has
equitable title to the real estate.

Section 196.041(2), F.S., provides that:

A person who otherwise qualifies by the required residence
for the homestead tax exemption provided in s. 196.031
shall be entitled to such exemption where his possessory
right in such real property is based upon an instrument
granting to him a beneficial interest for his life, such
interest being hereby declared to be "equitable title to
real estate," as that term is employed is s. 6, Art. VII of
the State Constitution; and such person shall be entitled
to the homestead tax exemption irrespective of whether such
interest was created prior or subsequent to the effective
date of this act.

Thus, the Legislature has declared that a possessory right
in real property granted to a beneficiary for his life shall
be equivalent to "equitable title to real estate."2 The
courts have recognized that the Legislature has the "pre-
rogative to classify property for the purpose of taxation,
so long as the classification is based upon some reasonable
distinction rationally related to the purpose for which the
statute was enacted, and so long as it does not conflict
with any provision of the state or federal constitution."[3]

In addition, the courts of this state have recognized that
the homestead exemption is to be construed liberally for the
benefit of those whom it is designed to protect.[4]

Inasmuch as the beneficiary resides on the property and has
a possessory right in such real property based upon the
trust instrument which grants him such beneficial interest
for his life, the beneficiary, pursuant to s. 196.041(2),
F.S., is considered to have "equitable title to real
estate," and, having complied with all the requirements of
s. 6, Art. VII, State Const., is entitled to the homestead
tax exemption.

Sincerely,



Robert A. Butterworth
Attorney General

RAB/tcs
-------------------------------------------------- ---------------

[1] Section 6(a), Art. VII, State Const. See also, s. 6(d),
Art. VII, State Const., and s. 196.031(3)(d) and (e), F.S.,
which increase the homestead exemption from $5,000 to
$25,000.

[2] Compare, AGO's 76-204, 74-313, 72-12, 56-271 and 55-78,
reaching the conclusion, prior to the adoption of
Ch. 78-324, Laws of Florida, that the interest of the bene-
ficiary for ad valorem tax purposes was intangible personal
property unless the trust was a passive or dry trust. To
the extent of any conflict, this opinion supersedes those
opinions.

[3] Miller v. Higgs, 468 So.2d 371, 377 (1 D.C.A. Fla.,
1985), rev. denied, 479 So.2d 117 (Fla. 1985).

[4] Drucker v. Rosenstein, 19 Fla. 191 (1882); Cain v. Cain,
549 So.2d 1161 (4 D.C.A. Fla., 1989)

Author greg biehl
Participant 

#10 - Posted: 31 May 2013 12:15 
thank you for this....but could the joanna biehl tr exemption in 1992 stay in effect after joanna biehl the person died in 1994........without any new exemption being filed

Author greg biehl
Participant 

#11 - Posted: 28 Jan 2014 19:21 
I am thinking of renting out a spare room in my house, on the 2014 renewal receipt it says[by law you must notify us if any portion of the property has been rented out].if i were to rent the room in may 2014 when do i notify them, Also should i make sure not to rent the room through jan 2 2015 [2 consecutive years]

Author johnbsims3
Admin 

#12 - Posted: 28 Jan 2014 20:54 
Yes, you are correct about the two year rule. I would notify the property Appraiser, and the worst case (as a matter of law) they will reduce the exemption by the same percentage as the rented portion.

Author greg biehl
Participant 

#13 - Posted: 29 Jan 2014 12:32 
thank you..is the law clear when i should notify them ,and the room is 400 sq.feet of a 2000 sq foot house ,how much money are we talking about.

Author johnbsims3
Admin 

#14 - Posted: 29 Jan 2014 12:34 
Based on the numbers, a reduction of 20% of the total exemption. Yes, the law is very clear...As far as money, it depends on the amount of taxes you pay, plus any increases, minus the 20% (of the total).

Author greg biehl
Participant 

#15 - Posted: 2 Feb 2014 16:18 
as per 196.011 [9] [a] if you rent a room in your house but never for 2 consecutive years , and never all of your house, and you remain in the home [primary residence] then the exemp status of the property has not changed and you have no duty to inform anyone of any thing ....am i right

Author johnbsims3
Admin 

#16 - Posted: 4 Feb 2014 16:08 
Correct!

Author greg biehl
Participant 

#17 - Posted: 8 Feb 2014 13:56 
Is renting a room considered change of use of a homestead property ,Is it a valid reason for removal of the exemption if i do not inform them.

Author johnbsims3
Admin 

#18 - Posted: 8 Feb 2014 15:54 
No...and no.

Author greg biehl
Participant 

#19 - Posted: 2 Jan 2016 15:06 
how do you draft a trust so that when the owner dies the trust retains the homestead exemption

Author johnbsims3
Admin 

#20 - Posted: 2 Jan 2016 15:51 
I don't know as I don't draft trusts, but there must be a clause in it that allows the homeowner to live in the home. the county Property Appraiser or an attorney that practices trust law can provide the exact language required.

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Exemption denial and Trusts
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