The New Homestead Trap: Surviving Spouses Are Trapped by Life Estates They No Longer Want or Can Afford

Florida’s homestead laws are causing problems for surviving spouses. The cost of living in their homes has gone up, including property taxes, insurance, and special assessments for hurricane damage. Many surviving spouses can’t afford to live in their homes anymore and want to move, but they’re trapped because they can’t sell or change their life interests. Florida law doesn’t offer any solutions for this problem. This is unfair because the value of the properties has gone up for the people who will inherit them, while the costs of maintaining the properties have gone up for the surviving spouses. If someone has a “life estate” in a property, they have to pay for things like regular repairs, property taxes, and insurance. This can be a big financial burden, especially for surviving spouses who may be living in a house they inherited. It can be even harder if the property is in an area that has been hit by hurricanes, because they may have to pay for repairs to common areas. The surviving spouse has had to bear increased living expenses while the property values that belong to the remainder beneficiaries have doubled or even tripled. This seems unfair because the remainder beneficiaries don’t have to pay for any of the increased costs. In families where the surviving spouse is also the parent of the remainder beneficiaries, and there is good family relationships, this situation might not be too bad. In fact, it could even be a good thing for estate planning. The surviving spouse can pay the high costs of maintaining the property while the property value goes up, and the children can benefit from this later on without having to pay taxes. Some families might even help out the surviving spouse with the extra expenses. When a home is owned by a mixed family, such as a step-parent and stepchildren, there can be a lot of tension and resentment. If the surviving step-parent wants to leave the home, they may not be able to afford to do so unless they sell the home and get their share of the money. The only option they have is to rent out the home, but the rent may not cover all the costs they still have to pay. This can create financial difficulties for the surviving step-parent. If a husband or wife dies and their spouse inherits the house but the kids also have a share in it, it can be really hard to sell the house. The kids might not want to sell it, even if the spouse can’t afford to keep it. The law doesn’t give the spouse a way to force the kids to sell. If the spouse just leaves the house, the kids can sue them for not taking care of the house. So, it’s a tough situation with no easy solution. In Chapman v. Chapman, the court said that a person with a life estate must take care of the property for the future owners. If they don’t, the future owners can take legal action. In this case, the future owners wanted all of their ownership rights right away because the life tenant didn’t pay property taxes. The court didn’t agree to that, but they did allow someone else to take care of the property and pay the taxes and rent it out. It’s a tough situation for surviving spouses with life estates, and we need to find a way to help them if they can’t live in or afford the property. The current laws don’t really help people who have a life estate in a property, so we should make a new law that gives them the right to either sell the property or have the other owners buy them out. This would give them more control and make things fairer. The statute should say what happens to the money when the property is sold. It could say that the money will be kept in a trust with the person who gets to use the property and one of the people who will get the property later will be in charge. The person who gets to use the property will get the money made from the trust, and when they die, the rest of the money will go to the other people. Another option is to set up a unitrust, which is a better way to handle the money because it encourages cooperation and could prevent arguments about how the money is invested. Florida’s “save our homes” cap allows for a homestead to be assessed at just value, but with limitations on annual changes. This can trap surviving spouses in homes they can’t afford. This is a poor public policy and needs to be addressed. This column is written by a lawyer who specializes in wills, trusts, and estates law. He is sharing information on behalf of a section that focuses on real estate, probate, and trust law. The section aims to teach its members the importance of serving the public, improving the justice system, and advancing the study of law.

Source: https://www.floridabar.org/the-florida-bar-journal/the-new-homestead-trap-surviving-spouses-are-trapped-by-life-estates-they-no-longer-want-or-can-afford/