On July 1, 2018 Senate Bill No. 512 – an Act relating to homestead waivers and providing language that may be used to waive spousal homestead rights became law. A new section of Florida Statues was created, entitled Section 732.7025 Waiver of homestead rights through deed.
For any real estate professional who has ever been involved in a real estate transaction where there have been warring spouses, long separated but still married spouses, or blended family situations, this new law likely caught your attention.
First, a reminder: Article X, Section 4 of the Florida Constitution restricts the devise of homestead property stating, in part:
(c) The homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child. The owner of homestead real estate, joined by the spouse if married, may alienate [transfer ownership] the homestead by mortgage, sale or gift and, if married, may by deed transfer the title to an estate by the entirety with the spouse.
While many in the real estate community were hoping that the following new statute would provide an avenue of relief for those troublesome “warring spouses” or blended family transactions, the reality is that the new statute is extremely limited in application. In order for the waiver to be effective, it must be included in the deed at the time the spouses take title to the property (i.e., at the time of purchase, at the closing). Specifically, the new law provides:
(1) A spouse waives his or her rights as a surviving spouse with respect to the devise [transfer] restrictions under Section 4(c), Article X of the State Constitution if the following or substantially similar language is included in a deed:
By executing or joining this deed, I intend to waive homestead rights that would otherwise prevent my spouse from devising the homestead property described in this deed to someone other than me.
(2) The waiver language in subsection (1) may not be considered a waiver of the protection against the owner’s creditor claims during the owner’s lifetime and after death. Such language may not be considered a waiver of the restriction against alienation by mortgage, sale, gift, or deed without the joinder of the owner’s spouse.
Our office always asks Buyers how they wish to take title to the property they are buying (and I suspect most other title agencies do the same, or certainly should) prior to the Closing Date. Most times married persons elect to take title as “Husband and wife as tenants by the entirety” (or some derivative of marital status – wife and wife, husband and husband, married, a married couple, etc.).
If you find yourself in the midst of a transaction that may involve more far reaching estate planning and/or family law issues for the buyer(s), it would be prudent for the buyer(s) to consult with their trusts and estates attorney or family law attorney to determine whether adding homestead waiver language to the deed is appropriate. In most instances it will not be, but in those unique circumstances where doing so might be appropriate, it will be up to the buyer(s) to alert their closing agent that one spouse wishes to include homestead waiver language to their deed.
In addition, the new law attempts to make clear (in part (2)), that such a waiver by deed does not waive the homestead protection against creditor’s claims against the non-waiving spouse. Even if such a deed is recorded with the required statement on it, the waiving spouse whose name is no longer on title will still be required to sign any future mortgages or deeds for such instruments to be effective against the waiving spouse.
Accordingly, in my view, the new law is extremely limiting in application, and does not achieve what many practitioners had hoped for. Therefore, as always, should you have any questions regarding homestead issues, we urge you to contact us or consult with your local real estate attorney.
Berlin Patten Ebling, PLLC
Article Authored by Mark C. Hanewich, Esq. firstname.lastname@example.org
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