Florida Homestead Planning And Irrevocable Trusts

Florida law prohibits the devise of a homestead if the owner is survived by a minor child or children. For purposes of this prohibition, the term "devise" extends to both gifts under a will and transfers by way of a revocable trust. As such, Florida homesteaders with minor children are tightly restricted in their ability to transfer the homestead upon death.

An improperly devised homestead descends in accordance with Florida's intestacy laws, which generally provide for a life estate in the surviving spouse and a vested remainder in the decedent's lineal descendants. Therefore, an improper devise of a Florida homestead can frustrate a person's dispositive wishes, potentially resulting in complicated, unanticipated and unwelcomed issues regarding the marketable title, use, and ownership of the homestead. The homestead restrictions can be especially problematic for funding credit shelter trusts, special needs trust planning, and qualified personal residence trust planning.

Florida law offers several options for planning around the homestead restrictions. One of the most useful options involves irrevocable trust planning. Under Florida law, if a homeowner conveys his or her interest in a homestead to an irrevocable trust without retaining any power to revoke or revest such interest, the transfer to the trust is not considered a devise, and the disposition of the homestead interest as directed by the trust will be respected.

Irrevocable trusts are, of...