In Florida, it is not uncommon for spouses to hold title to property separately, especially if that property was acquired outside or prior to the marriage. However, it becomes particularly problematic when that spouse passes away, because many times the surviving spouse is not included on the title, which then requires a probate proceeding to transfer legal title to them. We are often asked by couples to advise on how their spouses can inherit their real property if their spouse is not on the deed. There are a couple of different routes to take in order for your spouse to inherit your separate property. A few options are:
- Create a joint tenancy with rights of survivorship;
- Adding a spouse to the title of a property creates a joint tenancy. This form of ownership is one where more than one person owns an interest in a property. By including the words “right of survivorship” to a joint tenancy, a co-tenant will be automatically entitled to full title of the property once the other co-tenant passes away and probate will be avoided. Avoiding probate will save the surviving spouse considerable time and money.
- Execute an enhanced life estate deed with a remainder beneficiary:
- A life estate is an interest in real property for the duration of a person’s life. Once a life tenant passes away, title to the property is automatically transferred to a successor, referred to as remainderman, which is designated in the deed. Under this limited form of ownership interest, the remainderman must give consent in order for a life tenant to transfer the property during his or her life. In Florida, once the deed is recorded, the right of the remainderman to receive title in the future becomes vested.
- However, under an enhanced life estate in Florida, a life tenant retains complete control over the property and a remainderman’s consent is not needed. Additionally, title automatically vests in the remainderman upon the life tenant’s death without the need for probate. Another advantage is that a property subject to an enhanced life estate retains homestead protection.
- Estate Plan Transferring the Property to a Trust:
- Another option would be to create a trust that stipulates that the surviving spouse is to receive the property upon the other spouses’ death, which is an effective method to avoiding probate. There are various types of trusts that can accomplish this goal.
Each option has advantages and disadvantages and requires a closer look at a number of factors, such as whether the property has a mortgage or encumbrance, homestead rights as surviving spouse, etc.
