What are the various ways one can take title to real property in Florida?
A purchaser (or owner) of real property in Florida may take title to real property in a variety of ways, depending on which estate planning, asset protection, business planning, or other objectives he or she may wish to achieve.
A purchaser may take title by means of a life estate, by means of various tenancies (a tenancy in common, or joint tenants with rights of survivorship, or as a tenancy by the entirety), or with the use of various legal entities (e.g., trusts, corporations, limited liability companies).
What is a “life estate”?
The life estate provides a useful tool to the property owner in achieving a particular estate planning objective. By means of a life estate, a person can convey real property to another person “for life.” The grantor can also specify whether the duration of the estate is to be measured by grantee’s life, or by a completely separate third person’s life. This last type of life estate is called a life estate per autre vie. When the person whose life is being used to measure the duration of the life estate dies, the estate automatically reverts to the grantor or his heirs.
Life estates occur in a variety of circumstances. They can arise as legal life estates in voluntary conveyances, or under Florida’s homestead provisions, or as equitable life estates in the context of trusts.
What are the various types of “tenancies”?
Persons taking title to real property together with others must choose between a tenancy in common and a joint tenancy with the right of survivorship. And if they are married, they may include a tenancy by the entireties among their options.
Each of these forms of concurrent ownership is best suited to achieving a different objective. Thus, one must carefully consider the characteristics of each, and consult with one’s attorney, when deciding which form to use.
In a tenancy in common, each tenant owns an undivided interest that is not necessarily equal to the other tenants’ interests, there is no right to survivorship, and each tenant’s interest is freely alienable and attachable by creditors.
In a joint tenancy with the right of survivorship, all of the tenants as a unit own the whole, joint ownership, there is a right of survivorship, and each tenant’s interest is freely alienable and attachable by creditors.
In a tenancy by the entireties, husband and wife own the whole, joint ownership, there is a right of survivorship, but both husband and wife must join in alienating the tenancy, and it is not available to answer for the individual debts of either spouse.
What are the benefits of taking title using various legal entities?
Taking title by means of various legal entities provides differing asset protection and estate planning benefits depending on the type of legal entity chosen. The following list provides a general description of the benefit provided by the different legal entities:
Entity Type Benefit
Revocable trusts estate planning
Irrevocable trusts asset protection and tax savings
Land trusts privacy
Corporations “inside-out” liability protection
Limited liability companies “outside-in” and “inside-out” liability protection
General partnerships not good choice
Limited liability partnerships “outside-in” and “inside-out” liability protection
Remember, the above discussion is only general in nature and one should consult with an attorney before attempting to make any selection so that a sound and correct choice is made.
What is homestead and what rules must be followed when conveying it?
The Florida Constitution provides an exemption from forced sale for the family homestead.
The owner of homestead real estate may alienate the homestead by mortgaging it, selling it, or giving it away. If the owner is married, his or her spouse must join in the transaction.
When a spouse fails to join in a transfer of title by deed, whether the result of a sale or a gift, the prevailing view is that the deed is void, as to the heirs of the homestead and as to the non-joining spouse.
The constitutional exemption of homestead property protects the homestead from most liens.
