Probate Court And Your Homestead Property
You may have already known that Florida has one of the strongest protections for homestead property of any state in the nation. With certain exceptions, the entirety of the equity in your homestead is protected from creditors—absent an actual mortgage or security agreement, a creditor cannot take your homestead property to satisfy a debt.
Homestead in Probate Court
But what about in probate? Probate court does have creditors, and they may want a piece of the equity in your homestead.
On the one hand, your homestead was your homestead, and thus, protected from creditors. But now, if you pass, it technically is not your homestead, and even if you leave it to someone else (a beneficiary), it isn’t their homestead either—at least not yet. So does the homestead protection remain, even in probate?
The answer is yes—creditors of your estate cannot make any claims on your homestead property, whether in probate, or afterwards, when it passes to your descendants or beneficiaries.
Remember that there are times when your homestead can be taken to satisfy a debt, whether in probate or not. They include mortgages or anytime you voluntarily lien your home, liens for construction or improvements on the property, taxes, or any liens that were incurred before the property was actually your homestead.
Designating Homestead Status
However, the property must be homesteaded, and there must be a determination in the probate court of the property’s homestead status. This generally means that you lived in Florida, the property was your primary residence, and there are also certain size limitations to the property, depending on whether the property is in a city or a rural area.
Additionally, the homestead must be passed onto heirs of the deceased, in order to keep these creditor protections.
Spouses and Kids
There are protections for your family as well, when property is deemed to be homestead by a probate court. The designation means that your spouse and children will inherit the homestead property, no matter what any estate documents you may draft, may say to the contrary. If your children are adults, only your spouse can take the property (another reason to get legally divorced, for people who are separated but have put off making the end of the marriage legal).
Of course, your heirs may want to sell the property that was left to them. However, to do so, you will still need to have the probate court determine the property is homestead property, for title insurance purposes. Many underwriters want this determination from a court.
All of this is why it is so important in probate court to ask the court for a determination of homestead status. But many people skip this step given that technically, homestead property is not subject to probating and is not considered an asset in probate.
Call a West Palm Beach probate lawyer at The Law Offices of Larry E. Bray today if you have a problem or question about what you can expect in probate court.