Any Way to Continue FL Homestead Exemption Should I Pass Away

[lester12345]

What is the name of your state (only U.S. law)? Florida

I currently own a home without a mortgage in Palm Beach County. I have a Revocable Living Trust and my home is titled to the Trust. Should I pass away before my "significant other", it is my desire to let her live in the home rent free and for my children to pay for the significant expenses (Property taxes, insurance, utilities) as long as she wants. They would have no problem with my desire.

I have the Florida Homestead Exemption, which is a significant benefit to a resident of Florida. I would like to continue to maintain this exemption should I pass away first, since this would save significant amounts on Property taxes. Anyone have suggestions on how I can accomplish this? (I do not have a lawyer)

 

[LdiJ]

What is the name of your state (only U.S. law)? Florida

I currently own a home without a mortgage in Palm Beach County. I have a Revocable Living Trust and my home is titled to the Trust. Should I pass away before my "significant other", it is my desire to let her live in the home rent free and for my children to pay for the significant expenses (Property taxes, insurance, utilities) as long as she wants. They would have no problem with my desire.

This is something that you should seriously think about. While your children may be in a position now to cover all of those expenses, that is no guarantee that they will be in that same position some years after you pass away. Financial reverses can happen to anyone and you may be sticking your children with something they will not be able to maintain. Allowing a spouse or significant other a "life estate" in a home is very common, but expecting the remaindermen to cover the upkeep, taxes, insurance and utilities is not common or the norm at all.

You might be better off funding another trust to cover those expenses (if its possible for you to do that), with the trust reverting to your children after your significant other no longer wants or needs the use of the home.

I have the Florida Homestead Exemption, which is a significant benefit to a resident of Florida. I would like to continue to maintain this exemption should I pass away first, since this would save significant amounts on Property taxes. Anyone have suggestions on how I can accomplish this? (I do not have a lawyer)

That I don't believe that you are going to be able to do. Someone must both own and occupy the residence in order to qualify for the exemption. However a local real estate attorney may be able to tell you whether or not someone holding a life estate in a property would qualify for the Homestead exemption...I doubt it, but it doesn't hurt to consult a professional.

 

[latigo]

What is the name of your state (only U.S. law)? Florida

I currently own a home without a mortgage in Palm Beach County. I have a Revocable Living Trust and my home is titled to the Trust. Should I pass away before my "significant other", it is my desire to let her live in the home rent free and for my children to pay for the significant expenses (Property taxes, insurance, utilities) as long as she wants. They would have no problem with my desire.

I have the Florida Homestead Exemption, which is a significant benefit to a resident of Florida. I would like to continue to maintain this exemption should I pass away first, since this would save significant amounts on Property taxes. Anyone have suggestions on how I can accomplish this? (I do not have a lawyer)

To begin, a homestead exemption is personal to the claimant.

Secondly, such exemptions are not transferable inter vivos or upon the death of the claimant.

Thirdly, they are only available to natural persons. Hence, you need to speak with a Florida attorney experienced in these laws. There may be some question as to whether or not your claim of exemption is valid inasmuch as you have transferred title into a trust.

I’m not versed in these laws and there may be a distinction between a homestead for property tax purpose and one for exemption against creditors.

But there is case law in your state to effect that a person that has transferred ownership of real estate under a revocable trust “may not claim the Florida property as covered by the homestead exemption.” Example: In Re BOSONETTO, 271 B.R. 403 (M.D. Florida, (2001)

“This Court finds that the Trust does own the Florida property by the express terms of the Trust or, alternatively, under a resulting trust and because a trust is not a natural person, Defendant Bosonetto may not claim the Florida property is covered by the homestead exemption.”

 

[lester12345]

Thank you for the replies.....

Firstly, I am well aware of the anticipated expenses associated with this desire, and it will more than adequately be covered by assets and insurance.

Regarding my current FL homestead exemption, I was able to maintain this due to the way the Quit Claim Deed was prepared and processed several years ago.

Are there any suggestions to my request?

 

[latigo]

Thank you for the replies.....

Firstly, I am well aware of the anticipated expenses associated with this desire, and it will more than adequately be covered by assets and insurance.

Regarding my current FL homestead exemption, I was able to maintain this due to the way the Quit Claim Deed was prepared and processed several years ago.

Are there any suggestions to my request?

Apparently you haven’t been paying attention, Lester. Either that or you only listen to what you want to hear.

The taxation exemption allowed under Section 196.011 * of the Florida Statutes ONLY applies to persons or organizations that are the record owners of the subject property!

Here, you tell us that you conveyed the home to a trustee under a revocable living trust. Which means that the trustee and not you is the record owner of the property.

The only way you could have received the exempt status is if you some how voided and unwound the trust and had the property re-conveyed to you, which is a most difficult and complicated process,

OR YOU FALSIFIED YOUR ANNUAL APPLICATION BY SUBMITTING SOME PHONY QUITCLAIM DEED.

And that would be perjury!

1)(a) Every person or organization who, on January 1, has the legal title to real or personal property, except inventory, which is entitled by law to exemption from taxation * * * *

____________________

Furthermore and again! The tax exemption is not transferable! If indeed you are legally entitled to it, which seems most improbable, it will not survive your death.

 

[Mass_Shyster]

The taxation exemption allowed under Section 196.011 * of the Florida Statutes ONLY applies to persons or organizations that are the record owners of the subject property!

I bet someone told him not to record the deed to the trust, leaving him as record owner, but the trust as legal owner.

 

[anteater]

Property held in a revocable living trust can still qualify for the homestead property tax exemption.

 

[latigo]

Property held in a revocable living trust can still qualify for the homestead property tax exemption.

Then you are disagreeing with the following ruling by the United States Bankruptcy Court, M. D Florida, Jacksonville Division in the case of In Re Bosonetto 271 B. R. 403 (2001):

“This Court finds that the Trust (revocable living trust) does own the Florida property by the express terms of the Trust or, alternatively, under a resulting trust and because a trust is not a natural person, Defendant Bosonetto may not claim (that) the Florida property is covered by the homestead exemption.”
____________

And curiously we have this from the Florida Constitution:

Article X, Section 4.Homestead; exemptions. —

“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person: “ (Emphasis added)

 

[anteater]

But you are referring to the creditor protection aspect of the homestead. (And my understanding is that there are conflicting opinions there - In re Edwards - although it isn't exactly something that I avidly follow.)

196.031 Exemption of homesteads.—
(1)(a) Every person who, on January 1, has the legal title or beneficial title in equity to real property in this state and who resides thereon and in good faith makes the same his or her permanent residence, or the permanent residence of another or others legally or naturally dependent upon such person, is entitled to an exemption from all taxation, except for assessments for special benefits, up to the assessed valuation of $25,000 on the residence and contiguous real property, as defined in s. 6, Art. VII of the State Constitution....

Shoot, Lats, you think all those probate-avoiding, living trust-loving Floridians are foregoing their homestead property tax exemptions?

 

[LdiJ]

Then you are disagreeing with the following ruling by the United States Bankruptcy Court, M. D Florida, Jacksonville Division in the case of In Re Bosonetto 271 B. R. 403 (2001):

“This Court finds that the Trust (revocable living trust) does own the Florida property by the express terms of the Trust or, alternatively, under a resulting trust and because a trust is not a natural person, Defendant Bosonetto may not claim (that) the Florida property is covered by the homestead exemption.”
____________

And curiously we have this from the Florida Constitution:

Article X, Section 4.Homestead; exemptions. —

“(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person: “ (Emphasis added)

With due respect to the presented case law, a revocable trust is different from many legal aspects than an irrevocable trust. In regards to a revocable trust the tax attributes normally remain with the founder of the trust and often the assets intended for the trust do not actually enter the trust until the death of the founder of the trust.

Therefore the above case law may not be relevant to the OP's case.