I’ve long preached that conveying Florida homestead is tricky given the peculiarities of Florida law. A recent court case out of the 4th District Court of Appeal in Florida illustrates this point. So I thought that I would share it with you today.
In Lyons v. Lyons, Norma was married to Richard. In 1993, Richard conveyed his interest in the homestead to Norma so that she owned it individually. Norma then transferred the homestead into a Qualified Personal Residence Trust (QPRT) that upon its expiration would distribute the home to all of her five children, Valerie, Dorothy, Sanford, Timothy and John. Norma signed the deed transferring the homestead to the QPRT individually and Richard did not sign the deed. A Qualified Personal Residence Trust is an irrevocable trust that cannot be undone once signed.
Richard then died in 2007. In 2010 Norma went to her attorney and deeded the homestead from her name to her daughter Valerie. You might think that she had no power to do this since she had already irrevocably transferred the homestead to the QPRT. Norma’s attorney reasoned that the original deed to the QPRT was void, based upon Florida law that requires both spouses to sign a deed of conveyance, even if only one spouse owns the residence in her name individually. So he reasoned that because Norma’s 1993 deed to the QPRT was void, she had the power to convey the homestead to her daughter Valerie, bypassing the other children.
The three sons, who were the acting Trustees of the QPRT sued Norma, Valerie and the attorney to set aside Norma’s conveyance to Valerie.
In 2002, Richard had signed a Will in which he acknowledged the existence of the QPRT. While the trial court sided with Norma, Valerie and the attorney, on appeal the 4th District Court of Appeal (DCA) reversed. It determined that Norma’s assertions that her own deed was void were absurd, as Richard was the only party who could assert the Florida law protections governing the disposition of the homestead without his signature.
In other words, Norma could not attack her own 1993 deed based upon a technicality that only harmed her spouse, who was already deceased and made no objection when the residence was originally transferred to the QPRT. The law in question is found in the Florida Constitution, and is there to protect a spouse (or minor child) from a conveyance of their Florida homestead without their consent.
Despite the decision in Lyons, the Constitutional and statutory protections surrounding the conveyance of homestead remain strong. Even if a Florida homestead residence is in the name of only one spouse, the other spouse needs to sign the deed in order to convey the residence to a third party. What the 4th DCA
held was that the party objecting must have legal standing to void a faulty deed. Here that party was a deceased spouse. So the QPRT ended up owning the residence and all five children shared in the bounty.
This case highlights the importance of understanding the peculiarities of Florida homestead law within any estate plan. That’s one of the many reasons why individuals who move here from another state should review their estate plans with competent Florida counsel