By James W. Mallonee
When a Florida citizen dies, his or her permanent Florida residence passes to their lineal descendants when there is no Will.
This magical event occurs at the moment of death. If the person who passes has a Will, then the beneficiaries named in the Will are normally the recipients of the decedent’s permanent residence. The permanent residence is generally recognized as the decedent’s homestead.
As a result of a person’s homestead passing at the moment of death, it cannot come under the jurisdiction of a probate court because it is outside the confines of the estate proceedings. What that means is that the homestead property is not a probate asset. However, to assure the beneficiaries that it is free of creditor claims, a petition is presented to the court requesting that it rule such property be recognized as homestead and thus free from the claims of creditors (with some exceptions).
The determination of homestead status is a proceeding for the purposes of only determining if the property is truly homestead protected property and not to convey title to such property. In those situations where homestead property is owned by a husband and wife, upon the death of one of the parties, the rules for homestead determination by a court of law is invalid. The reason for this is that the property is owned as tenants by the entireties and upon the death of either the husband or wife, the property passes by operation of law to the survivor of the them without any court proceeding.
So, what is this challenging of a homestead order all about? The issue involved ownership of property held as tenants by the entireties and a mortgage obtained following a deceased spouse’s death. It all started following a spouse’s death, the surviving spouse sought and filed a petition to the court to determine the homestead status of the couple’s property. Naturally, the court issued an order indicating that the property descended to the surviving spouse and was free of creditor claims.
The surviving spouse then obtained a mortgage from Quicken Loans. The surviving spouse eventually passed and the descendants of the surviving spouse filed a lawsuit to quiet title regarding the effect the homestead order filed in the previous spouse’s estate had upon Quicken Loans mortgage against the surviving spouse’s homestead property. Apparently, the court’s order read that the surviving spouse only obtained a life estate with a vested remainder to the surviving descendants. Thus, the argument was that Quicken Loans only possessed an interest in the surviving spouse’s life estate which terminated upon the surviving spouse’s death. As a result, the surviving children argued that Quicken’ s mortgage was no longer valid.
Quicken argued that the court for the initial spouse that died had no jurisdiction over the property because it was property held by the husband and wife which created a tenants by the entireties interest and thus was invalid. The court did determine that the property was held as husband and wife creating the tenants by entireties interest and at the death of the first spouse, the property moved by operation of law to the survivor; no determination of homestead status was ever necessary. This caused the initial determination of the homestead order to be invalidated.
Quicken Loans argued (and correctly so) the consequences of the court’s order creating the life estate interest in the property was incorrect because the property was held as husband and wife, creating the tenants by the entireties interest. It should never have been adjudicated by the probate court because it was not a probate asset nor did it ever enter into the court’s jurisdiction.
The message to learn from this situation is that third parties can challenge probate orders determining homestead status. This ability to challenge should only occur if at the death of one of the spouses, the property is held as husband and wife and an order is issued determining how the property will pass to the surviving spouse. It is this order that can be invalidated by third parties because it never came under the jurisdiction of the court. In essence, these events should never have happened.
If you are not sure how your permanent Florida property is held, contact the attorney of your choice and ask that very question. The determination of the legal interest you hold could possibly result in an undesirable outcome following your death.
This article is intended for informational use only and is not for purposes of providing legal advice or association of a lawyer – client relationship.
James W. Mallonee (Jim Mallonee) is a graduate with a B.A. degree from the University of South Florida and a Master of Science degree from Rollins College in Winter Park, Florida. He obtained his Juris Doctorate from the University of the Pacific, McGeorge School of Law in Sacramento, California. Prior to returning to Florida to practice law, Mr. Mallonee was employed by Intel Corporation for 22 years in such locations as New Jersey, Florida and California.
In addition to being a member of the Florida Bar since 2003, Mr. Mallonee serves on the Charlotte Community Foundation Committee for asset allocation and teaches Business Law at State College of Florida. Mr. Mallonee is also on the Board of Directors for the Military Heritage Museum located in Charlotte County, Florida.
His firm practices law in the following areas: Probate, Wills & Trusts, Guardianships, and Litigation in the areas of Real Estate, Guardianships and Estates. The firm has two locations in Venice and Port Charlotte, Florida.
946 Tamiami Trail, #206
Port Charlotte, FL 33953
(941) 206-2223
Facsimile (941) 206-2224
871 Venetia Bay Blvd., #225
Venice, FL 34285
(941) 207-2223