Keeping The Family Home In The Family: Ways Of Transferring House To Children

If you are a parent and Florida homeowner, there is a good chance that you have thought about whether and how to leave your house to your children once you are gone. If you have more than one child, you may also have considered ways of transferring house to children to ensure that each child is treated fairly, and to avoid unnecessary tension between the siblings. Ultimately, the most appropriate ways of transferring house to children will depend upon the unique circumstances of your family – in combination with the laws of the state. Florida law contains a number of provisions for the transfer of real property, both during the property owner’s life and as part of the probate process after their death. To learn more about your legal options for passing on the family home, or to seek assistance in preparing estate planning documents to make your dream a reality, consider scheduling a consultation with Loughlin Law, P.A. Our team has experience handling real property transfers for Florida families in a variety of circumstances, and we provide robust support for our clients throughout every stage of the estate planning process and beyond. Call 561-677-8384 today to set up your appointment.

Rights and Assets: Real Property vs. Real Estate

According to Cornell Law School’s Legal Information Institute (LII), “real property” refers to the legal rights to use or dispose of a piece of land, inclusive of any built or naturally-occurring structures permanently attached to that parcel; the transfer of real property will include the transfer of these same legal rights. For most practical purposes, it is not necessary to distinguish between real property and real estate, which Cornell’s LII defines as a parcel of land together with any fixed structures or other assets permanently attached to it or embedded in it, with examples including not just dwellings and storage or recreational facilities but natural resources such as timber or minerals, but Florida estate planners looking for the best ways of transferring house to children will encounter both terms, so for simplicity’s sake it may be helpful to think of real estate as the land and anything built on it or growing in it, and real property as the legal rights associated with ownership of that land. In most cases, an individual planning to transfer the family home to their child or children will want to transfer the property rights in perpetuity – but there could be exceptions, so understanding the differentiation between terms can set Florida homeowners up for success as they evaluate their options for transferring house to children.

Transferring House to Children: Implications of Florida’s Homestead Law

Florida’s “homestead” law, outlined in Chapter 222 of the Florida Revised Statutes (2023), makes some important provisions for how a family home may be protected from creditors during the homeowner’s life, and from claims against the estate during probate. The “homestead exemption” requires the homeowner to complete, sign, and file a copy of Florida Department of Revenue Form DR-501 with the circuit court of the county in which the home is located.

Applying for Homestead Exemption

Once the application for homestead exemption has been approved, up to $50,000 of the property’s value may be exempt from property tax, and the home will also be exempted from most liens levied for debt collection. Homesteading a property will have a number of implications for its future disposal, however, as properties defined as homesteads will be transferred to the heirs specified by the state’s Probate Code, without regard to any preferences expressed in the homeowner’s Last Will and Testament (Will).

Limitations on Transfer of Homestead Property

Florida’s Probate Code includes provisions for what is known as the “elective share” of the “surviving spouse.” Assuming a Florida decedent is survived by their spouse, the elective share requirement will supersede any wishes the decedent has indicated in their Will.

In households where the spouses have owned the family home jointly, this may make little difference, as right of survivorship would in many cases cause the decedent’s share to revert to the surviving co-owner regardless; however, for individuals who have owned a piece of real estate exempted as homestead under Chapter 222, the inclusion of the real property in the elective estate, from which the surviving spouse’s elective share is to be calculated, pursuant to § 732.2035, and the surviving spouse’s right to make their election between a life estate in the homestead property (thence to be passed on to the heirs as if the decedent had died intestate) and a one-half ownership shared with such heirs, under § 732.401, may be important considerations.

Transferring House to Children: Creating a Trust

In some instances, putting the family home into a trust may be an option. Trusts can be complicated to establish, but once created a trust may offer a convenient mechanism for the transfer of some of a family’s most significant assets, keeping the home out of the probate process and providing a means for its smooth transfer directly to the intended beneficiaries. Individuals or married couples considering this option for transferring house to children may wish to consult with an experienced Florida probate and estate planning lawyer with Loughlin Law, P.A. to discuss whether a living trust is the most appropriate option for their situation.

Transferring House to Children: Gifting or Selling the Home

Estate planning attorneys will often seek to steer homeowners away from gifting their homes to their children outright, or selling the family home to the children at a deep discount. While generously intended, both of these options can result in heavy financial penalties for the children in the form of gift taxes, and potentially audits if the tax authorities consider the amount paid in the sale to be out of line with a realistic valuation of the property. Before choosing this method of transferring the family home to your children, consider speaking with a probate and estate planning attorney familiar with tax law, who can help you evaluate whether these options will truly ensure your loved ones are cared for after you are gone.

Speak With an Experienced Estate Planning Attorney Today

If you are considering ways of transferring house to children in order to make sure that the family home remains in the family and your children are provided for, you have a number of options under Florida’s property transfer and probate laws. The most appropriate option to choose will depend on your unique situation, so it may be helpful to speak with an estate planning and probate attorney who can sit down with you, develop an understanding of your assets, your family, and your estate planning priorities, and assist you in evaluating the various strategies available for transferring house to children. Set up a consultation with Loughlin Law, P.A. by calling our Boca Raton office today at 561-677-8384 to speak with a member of our team.