As a lawyer practicing in Miami and Ft. Lauderdale, Florida, Mitchell Silverstein has encountered many clients who are navigating the unique challenges of estate planning in the state. Florida’s laws on homestead exemptions and elective shares can be complicated, even for those who believe they have prepared a solid estate plan. These provisions are intended to protect certain rights, but they can also lead to confusion, misunderstandings, and unintended consequences if not properly accounted for during the planning process.

In this blog, Attorney Mitchell Silverstein breaks down the basics of these two critical components—homestead exemptions and elective shares—and provides insight into how Florida residents can effectively navigate these aspects of estate planning to protect their assets and their loved ones.

Understanding the Homestead Exemption in Florida

The homestead exemption is one of the most important features of Florida estate law, and it’s also one of the most frequently misunderstood. Under the Florida Constitution, the homestead exemption serves two key purposes: providing protection from creditors and imposing restrictions on how the property can be transferred upon death.

Creditor Protection

One of the most significant benefits of the homestead exemption is its protection against forced sales by creditors. In Florida, a person’s homestead property cannot be taken to satisfy the vast majority of debts, with the exception of mortgage payments, taxes, and construction liens. This protection allows homeowners to pass down property to their heirs without fear that creditors will seize the home to satisfy debts after their death.

I’ve seen many clients breathe a sigh of relief when they understand that their home, often their most valuable asset, will be shielded from creditors even in the event of their death. However, it’s important to understand that the protection applies only to the primary residence, not second homes, rental properties, or other types of real estate.

Restrictions on Transfers

While the homestead exemption offers robust protections from creditors, it also places restrictions on how the property can be devised (transferred) upon death, particularly when it comes to a surviving spouse and minor children. If the homeowner is survived by a spouse or minor children, the Florida Constitution mandates that the homestead must pass in a certain way, limiting the owner’s ability to leave the property entirely to someone else, such as other adult children or a beneficiary named in a will.

For instance, if a homeowner with a surviving spouse dies, the spouse is entitled to a life estate in the homestead, meaning they have the right to live in the home for the rest of their life. Alternatively, the surviving spouse can elect to take a half-interest in the home as a tenant in common, with the other half going to the deceased’s children. This structure can sometimes create tension among family members, particularly in blended families or when there are adult children from a prior marriage.

These restrictions make it vital to consider the homestead exemption early in the estate planning process. Failing to account for these limitations can lead to unintended outcomes, such as disinheriting a spouse or triggering family disputes over how the property should be divided. In my practice, I always ensure that clients understand these limitations and plan accordingly, whether through the use of trusts, prenuptial agreements, or careful drafting of their wills.

Elective Share: Protecting the Surviving Spouse

Florida’s elective share law is another critical component of estate planning that comes into play when a person dies and leaves behind a surviving spouse. Under Florida law, a surviving spouse is entitled to claim an elective share, which is essentially a portion of the deceased spouse’s estate, regardless of what was outlined in the will. This law is designed to protect spouses from being entirely disinherited or left with an unfair portion of the estate.

How the Elective Share Works

In Florida, the elective share gives the surviving spouse the right to claim 30% of the deceased spouse’s estate. This percentage is calculated based on the decedent’s total estate, which includes not only probate assets (assets that pass through the will) but also certain non-probate assets, such as life insurance, joint bank accounts, and retirement accounts.

I’ve encountered situations where a surviving spouse was left with very little in the will, either because the couple was estranged, the decedent had children from a previous marriage, or they simply hadn’t updated their estate plan in many years. In these cases, the elective share law provides a crucial safety net, ensuring that the spouse receives at least 30% of the estate, regardless of the will’s provisions.

However, the elective share law can also create complications. For example, it may force the sale of certain assets, such as family businesses or investment properties, in order to meet the 30% requirement. This is why it’s critical for individuals to consider the impact of the elective share when creating or updating their estate plan. If someone wishes to leave a smaller portion of their estate to their spouse, or protect certain assets from being subject to the elective share, there are legal tools, such as marital agreements or trusts, that can help achieve this goal.

Addressing the Challenges of Homestead and Elective Share

The interplay between Florida’s homestead exemption and elective share laws can be complicated, particularly in cases involving blended families or when the estate includes significant assets outside of the homestead property. I often advise clients to take a proactive approach to estate planning, considering how these laws might impact their wishes for the distribution of their assets and working to develop solutions that balance the needs of all family members.

One of the most effective ways to address these challenges is through the use of a qualified personal residence trust (QPRT). A QPRT allows homeowners to transfer their homestead property into a trust while retaining the right to live in the home for a set period of time. At the end of that period, the home passes to the beneficiaries named in the trust, reducing the value of the estate for tax purposes and avoiding some of the restrictions imposed by Florida’s homestead laws.

Another strategy is the use of a marital agreement, such as a prenuptial or postnuptial agreement, to waive or modify the spouse’s right to an elective share. This can be particularly useful in cases where one spouse has significant assets or children from a previous marriage and wants to ensure that their estate is distributed according to their specific wishes.

Careful Planning is Key

Navigating Florida’s estate planning laws, particularly when it comes to the homestead exemption and elective share, requires careful planning and a clear understanding of the law. Without a comprehensive estate plan that addresses these challenges, individuals run the risk of leaving behind unintended complications for their loved ones.

As an attorney, I encourage my clients to take a thoughtful and proactive approach to estate planning. By understanding the intricacies of Florida’s homestead and elective share laws, and utilizing the right legal tools, it’s possible to create a plan that protects your assets, honors your wishes, and provides for your family in the way you intend.