Could your family lose your home when you die?
Could your family lose your home when you die?
Part of the probate process in Florida is dealing with the creditors of your loved one who passed away. Valid creditor claims are required to be paid if there are sufficient assets, and they must be paid before any heir or beneficiary can receive their inheritance from the estate. Sometimes these claims can deplete the assets so much that there is little to nothing left for anyone else.
Luckily, Florida protects certain assets from the reach of creditors, but the assets have to be left to the right people. Specifically, Florida has extremely favorable Homestead protections which allow the homestead to be completely exempt from the reach of creditors, with the exception of any mortgages, taxes, and certain liens.
The protection does not work if the homestead is devised to a friend or a charity. In order to qualify for this protection, the homestead has to be devised to a family member within the class of persons categorized in the Florida Intestacy Statute. This means it must be devised to one or more of the following:
- Spouse;
- Descendants of the Decedent, which includes child, grandchild, great grandchildren, and so on;
- Parents;
- Siblings, or the sibling’s descendants (ie. niece, nephew, and so on);
- Grandparents;
- Aunts and uncles or their descendants; or
- Stepchildren
Devise; A gift of real property by a person’s last will and testament
There are a few exceptions to this rule. The first is if the Decedent is survived by a spouse or minor child, the home can ONLY be devised to them. If it is devised to anyone or anything else, that devise is considered invalid, and the home will still go to the spouse or minor children.
The second exception is that if the Decedent left a Will and directs the homestead to be sold in probate. If this happens, the homestead will lose its protection and will be subject to the creditor claims. It doesn’t matter who is intended to receive the proceeds, if a Will directs the homestead to be sold, the protection is lost. This is because the decedent is no longer devising the homestead but is devising money.
If you have questions about how this process works, please don’t hesitate to reach out to me.
– Joshua