Is Homestead Property Ever a Probate Asset?

By James D. “Jim” Camp, Jr., and Brian R. Dolan

The short answer to that question is “Yes” – under limited circumstances, and unless it is “protected homestead” property. However, some lawyers, possibly thinking solely of “protected homestead,” may respond with a “No” answer if they rely solely on a footnote in Clifton v. Clifton.¹

As is well known, Florida’s homestead law – like Gaul – is divided into three parts: 1) a partial exemption regarding ad valorem taxes, 2) an exemption from forced sale by creditors, and 3) a restriction on testamentary dispositions. See Stone v. Stone. ² The third part is discussed here.

One thing is clear, case law referencing homestead, which is called many names³, can be confounding and sometimes self-contradictory, thereby causing no little consternation among probate and real estate lawyers, not to mention the courts.

Article X, Section 4(c) of the Florida Constitution and Fla. Stat. §732.4015 prohibit the homestead owner from devising homestead property if the owner is survived by a spouse or minor child, except that the owner may devise the homestead to his or her spouse if no minor child survives the owner. Conversely, and logically, if the owner is not survived by a spouse or a minor child, the owner may devise the homestead to whomever the owner pleases. See Bartelt v. Bartelt⁴.

Sections 733.607(1) and 733.608(1) support the affirmative response. These statutes essentially provide that real property, except “protected homestead,” comes either within the control or possession of the personal representative. Therefore, when unprotected homestead is permissibly devised, the statutory and constitutional proscription would not be applicable. The test is not how the title passes, but rather to whom it passes. Bartelt, supra.

In §731.201(33), “protected homestead” is defined as property described in Article X, Section 4(a)(1) in the Florida Constitution, which essentially is property exempt from creditors’ claims that passes to the owner’s spouse or heirs under Article X, Section 4(b).

Notwithstanding the foregoing, the repeated homage paid to footnote 3 in Clifton v. Clifton, dicta in two district courts (Second and Fifth) as well as the Florida Supreme Court, tends to muddy the waters. That footnote, in broad terms, states that “homestead property, whether devised or not, passes outside of the probate estate. Personal representatives have no jurisdiction over, nor title to, homestead, and it is not an asset of the testatory estate.” (Emphasis added)

In In re Estate of Jack Hamel (White v. Theodore Parker, P.A.)⁵ , the court recognized that “Florida courts have continued to hold that the homestead does not become a part of the probate estate unless a testamentary disposition is made to someone other than an heir” (Emphasis added). Incompatibly, the court then quoted, with a positive flavor, a portion of the Clifton footnote, writing, “Homestead property, whether devised or not, passes outside of the probate estate” and the court added, “perhaps the only recognized exception to the general rule [of homestead not being a probate asset] occurs when the will specifically orders the property be sold and the proceeds be divided among the heirs,” citing Knadle v. Estate of Knadle⁶ and Estate of Price v. West Florida Hospital, Inc.⁷ . Surely the court did not intend that the proceeds must literally be “divided” among all of the heirs, but rather that the proceeds could pass to any one of them and not necessarily to all of them.

In Harrell v. Snyder⁸, the court approvingly recited the Clifton footnote in full, yet in somewhat contradictory fashion, pronouncing that “homestead does not become a part of the probate estate unless a testamentary disposition is permitted and is made to someone other than an heir, i.e., a person to whom the benefit of homestead protection could not inure,” citing Hamel. (Emphasis added).

In McKean v. Warburton⁹ , the Supreme Court held, contrary to the usual rule, that the residuary homestead devise trumped the general devise of cash. In addition, after favorably citing the complete Clifton footnote, the court said homestead only becomes a probate asset (if permissibly devised) when it “pass[es] as a general asset of the estate by a specific devise,” or the Will directs that it be sold and divided among the heirs. See also Engelke v. Estate of Engelke¹⁰.

In the fairly recent Cutler v. Cutler case, no spouse or minor child survived the decedent, who devised her homestead property to her daughter and the adjoining vacant lot to her son. The en banc majority decision, reversing the prior majority panel decision, makes no mention of Clifton. However, the minority opinion quotes with favor the Clifton proscription, which declared that the probate court has no jurisdiction over homestead, citing Hamel, Harrell and McKean. The later Cutler opinion ruled that the homestead property was not “protected” and, therefore, did not pass free of the decedent’s creditors’ claims, stating that the decedent’s direction to have both children’s shares responsibility to pay creditors’ claims was the equivalent of directing that the homestead property be sold, citing Knadle and Price.

Section 19.19, p.19-22 of the Florida Bar Practice Under The Florida Probate Code (7th Ed.) supports the positive response to the title question, stating that “if the [homestead] property enjoys no exemption from creditors’ claims and its devise is not limited, and in fact it has been devised, it logically follows that this non-exempt homestead must necessarily be an asset of the estate in the hands of the Personal Representative.” (Emphasis added)

Regardless of the broad application of the Clifton footnote, and what appear to be contradictory statements in case law decisions approving Clifton, it is clear that if there is no spouse or minor child surviving the owner, unprotected homestead can be devised to anyone. Further, if it is not devised to an heir, it becomes a probate asset and is subject to creditors’ claims, administration costs and normal abatement rules. If the right facts fit the right mold, the ineluctable conclusion is that homestead property can and would be a probate asset.

¹ 553 So. 2d 192, 194 (Fla. 5th DCA 1989)

² 39 Fla.L.Weekly D2353, 2356 citing Engelke v. Estate of Engelke, infra

³ “Legal Chameleon”, Harold B. Crosby & George John Miller, Homestead Exemption, Our Legal Chameleon in Florida, 2 Fla.L.Rev. 12 (1949); “Chaos”, Rohan Kelley, Homestead Made Easy: Part I: Understanding the Basics, Fla. Bar Journal, March 1991; and, “Dragon”, Bruce Stone, Florida Homestead: The Legal Chameleon That Grew Into a Dragon (date unknown)(unpublished manuscript on file with the authors of this article)

⁴ 579 So. 2d 282 (Fla. 3d DCA 1991)

⁵ 821 So. 2d 1276, 1279-80 (Fla. 2d DCA 2002)

⁶ 686 So. 2d 631 (Fla. 1st DCA 1996)

⁷ 513 So. 2d 767 (Fla. 1st DCA 1987)

⁸ 913 So. 2d 749 (Fla. 5th DCA 2005)

⁹ 919 So. 2d 341 (Fla. 2005)

¹⁰ 921 So. 2d 693 (Fla. 4th DCA 2006)

This article was first published in the Broward County Bar Association Barrister, March 2015, page 10.