WHO IS AN HEIR AT LAW FOR PURPOSES OF EXEMPTIONS FROM FORCED SALE?; AND THE CONVEYANCING OF HOMESTEAD PROPERTY.
The above question is one that has been perplexing the District Courts of Appeal recently. So much so that the following question was certified to the Supreme Court as one being of great public interest and one which has caused a conflict between the District Courts. That question was:
Whether Article X, Section 4, of the Florida Constitution exempts from forced sale a devise of a homestead by decedent not survived by a spouse or minor child to a lineal descendent who is not an heir under the definition in Section 732.201(18) Florida Statutes (1993).
The court, in Davis v. Snyder, 681 So.2d 1191, has indicated that homestead provisions must be given a broad and liberal construction. Accordingly, the court determined that the term "heirs" when determining entitlement to the homestead protections against creditors is not limited only to those persons who would directly take under the intestacy laws upon the death of the decedent. Instead, the court said that it must be determined to mean that when drafting a Will an individual may devise the homestead, (presuming there is no surviving spouse or minor children,) to any of that class of persons characterized under Florida Statute 732.103. The court went on to indicate that to hold otherwise would mean that the testator would have to guess who his or her actual heirs would be upon the date of the testator's death, in order to maintain the homestead's constitutional protection against creditors.
A. Accordingly, when presently reviewing a probate transaction and we find that homestead property is devised by the decedent, who is not survived by a spouse or minor child, we must consider the necessary requirements under various scenarios as shown below:
1. The homestead property is devised to an heir at law. Please keep in mind that we look to F.S. 732.103 for a determination as to who would be considered an heir at law. It is important to note that there is a succession based upon blood ties to the decedent. However, at the very end of the section it does indicate that if there are no parties related to the decedent by blood, then, "the whole of such property shall go to the kindred of the last deceased spouse of the decedent as if the deceased spouse has survived the decedent and then died intestate entitled to the estate."
a. You must determine that the property was the homestead of the decedent. Factors to look at are:
i. Does the probate file indicate or give enough factual information for you to determine that the property was homestead. Consider looking at the address of the decedent on the Death Certificate and the last known address of the decedent as shown on the Petition for Administration.
ii. Verification by Affidavit from the personal representative.
iii. If you cannot make the determination after a review of the probate file and discussion with your local underwriter of the facts, then require a court order determination that the property was homestead.
b. You must determine whether the devisee is an heir at law. Factors to consider are:
i. If the relationship of the devisee to the decedent is disclosed in the Will or Petition of Administration, you may rely on such statements; Or
ii. Obtain an Affidavit from the personal representative as to these facts; Or
iii. Obtain a Disclaimer of Interest in the homestead property from the personal representative; Or
iiii. If you cannot establish the facts, after review with your underwriter, then require a court order determination as to the relationship between the decedent and devisee.
c. Require a warranty deed from the heir(s) at law who was devised the property. Be sure that the non-homestead language or marital status language relating to the devisee is placed in the deed. Also, it will be necessary to perform a twenty year name search of the heir at law.
2. Homestead property is devised to both heir(s) at law and non-heir.
a. Require a deed from the personal representative of the estate to cover the interest of the non-heirs. Be sure that the personal representative has the necessary authority to execute the deed and all appropriate notice(s) have been given. Further, require warranty deeds from the heirs who were devised the property. See 1(c) above for additional requirements.
3. The homestead property is devised to a non-heir who is a natural person.
a. Obtain the personal representative's deed and a deed from the individual who has been devised the property. In the alternative, require an affidavit from the devisee indicating that they are not an heir as defined under F.S. 732.103. That affidavit along with a personal representative's deed will be acceptable; Or
b. If an affidavit or a deed is not obtainable from the devisee, obtain a court order which sets forth such facts to determine that the individual was not an heir at law or obtain an affidavit from the personal representative that the devisee is a non-heir. Record the court order or affidavit along with obtaining a personal representative's deed; Or Accept affidavit from personal representative, that the devisee is a non-heir.
c. You are unable to obtain the affidavit or deed, a court order is not forthcoming and the non-heir devisee is unlocatable. Review the facts with your local underwriter. You will be asked whether an affidavit establishing facts can be obtained, and who might provide such an affidavit i.e. the attorney who prepared the Will, an accountant or a long time family friend. This Affidavit, if acceptable, along with a Personal Representative's Deed, will be required.
4. The property is devised to a trust. The Company needs to be provided with a copy of the trust for its review. Determinations will be made on a case by case basis. We will look to among other issues, who are the beneficiaries under the trust.
B. What happens when we are reviewing a chain of title and find that homestead property was conveyed by a personal representative and our review of the decedent's probate indicates that the property had been devised to heirs at law or you are unable to determine from the probate file if the devisee was an heir?
1. If the Personal Representative's Deed was recorded more than thirty years ago, the Company will require no further action.
2. If the devise of the homestead property took place less than thirty years ago.
a. If after the devise, the property has been insured by the Chicago Title Family of Insurers, send to your local underwriter pertinent documents for his or her review with you, such as the Will, Petition for Administration, Deed of Conveyance by the personal representative and the title policy.
b. If after the devise the property was insured by an underwriter other than one of the Chicago Title Family of Insurers, raise a requirement to obtain a warranty deed from the devisee. After discussion and the approval of your local underwriter, obtain an indemnity from the Company which insured the title of the seller.
c. If the devise took place less than thirty years ago and the property has not been insured previously (after you have verified with your local service center that the Chicago Title Family has not insured the title), then you are to raise a requirement to correct the problem, by obtaining a warranty deed from the heir(s).