The 4th DCA construes will properly devising Florida homestead
Pajares v. Donahue, --- So.3d ----, 2010 WL 934101 (Fla. 4th DCA Mar 17, 2010)
A will provision devising Florida homestead property is valid ONLY if BOTH elements of the following two-part test are satisfied:
- The homestead was subject to devise. In other words, the restrictions on the devise of homestead contained in Sect. 4(c), Article X, of the Florida Constitution and F.S. 732.401, F.S. 732.4015 do NOT apply. (When in doubt as to this point, refer to Kelley's Homestead Paradigm.)
- The will contains a specific power directing that the homestead property be sold and the sales proceeds distributed to the estate's beneficiaries.
The will at the heart of the linked-to opinion wasn't exactly a picture of clarity (thus the litigation). What's interesting about this case is the lengths to which first a probate court and then the 4th DCA went to carry out the decedent's intent, as clearly set forth in her will, even though the will lacked the sort of explicit homestead-sales clause discussed by the Florida Supreme Court in McKean v. Warburton and quoted by the 4th DCA below.
First, here's the less-than-clear text at issue in this case. The homestead property is a home in Delray Beach whose address is 202 N.W. 18 Street, Delray Beach, Florida 33444. To make sense of this opinion you'll need to focus on all references to that property:
Article One of the will stated that Kuhnreich's husband was deceased and she had no children.
Article Three, entitled “Specific Bequests of Real and/or Personal Property,” concerned two parcels of real property. First, a West Palm Beach condominium unit was devised outright to two named devisees. Second, “[f]rom the sale of: 202 N.W. 18 Street[,] Delray Beach, Florida 33444,” the will bequeathed specific dollar amounts to five persons: Robert Kuhnreich, $5,000; “Lane Abbot, AKA Orlando Abad,” $10,000; “David Mears, AKA David Abad,” $10,000; “Connie Abad, AKA Conchita Abad,” $30,000; and Maria De Cuena, $5,000. Article Three ended with this sentence: “In the event that I do not possess or own any property listed above on the date of my death, the bequest of that property shall lapse.”
Article Four was entitled “Homestead or Primary Residence.” It stated:
I will, devise and bequeath all my interest in my homestead or primary residence, if I own a homestead or primary residence on the date of my death that passes through this Will, to see above primary residence. If I name more than one person, they are to receive the property [X] equally, after all estate taxes, debts are satisfied.
And here's how the 4th DCA got to the "right" conclusion (if by "right" we mean: carrying out the decedent's testamentary intent vs. strictly enforcing Florida's restrictions on the devise of homestead property):
Where the decedent has no surviving spouse or minor children, homestead property may “pass as a general asset of the estate by a specific devise.” McKean, 919 So.2d at 345. “[W]hen the testator specifies in the will that the homestead is to be sold and the proceeds are to be divided[,] ... the homestead loses its ‘protected’ status.” Id. at 346-47 (citation omitted). “Thus, where the will directs that the homestead be sold and the proceeds added to the estate, those proceeds are applied to satisfy the specific, general, and residual devises, in that order.” Id. at 347 (citations omitted).
Reading Articles Three and Four together, we find that Kuhnreich specified that the Delray Beach property was to be sold and the proceeds divided according to the provisions of the will. With the italicized and underlined language, “see above primary residence,” Article Four specifically references the treatment of the residence in Article Three. Article Three indicates that the specific bequests will be paid from “the sale” of the Delray Beach home. In fact, the will provides for the Article Three bequests only through a sale of the real property: the will provides that if the decedent did not own one of the two properties on the date of her death, then “the bequest of that property shall lapse.” Article Four does not expressly say that the Delray Beach Property is to pass to Pajares and Donahue free of claims of the decedent's creditors, a hallmark of homestead property. See In re Estate of Hamel, 821 So.2d 1276, 1278 (Fla. 2d DCA 2002). Rather the devise is subject to “debts.” The will does not therefore demonstrate an intent to preserve the advantages of homestead for the property.
For these reasons, we affirm the order of the circuit court, which harmonized Articles Three and Four of the will.
Lesson learned?
If a client walks into your office with case involving freely-devisable homestead and a will that at first blush appears to lack the type of explicit homestead-sales clause discussed in McKean v. Warburton, don't be too quick to throw in the towel. Scour the will for language that could be read to imply the decedent intended or expected the homestead property would have to be sold. If you're dealing with freely-devisable homestead property, a decedent's testamentary intent shouldn't be frustrated simply because his or her will wasn't perfectly drafted. That's the argument, anyway. It worked in this case, it might work in yours.
Bonus:
Amy B. Beller of Beller Smith, P.L., in Boca Raton, Florida, was on the winning side of this case both at the trial-court level and on appeal. In this interview I invited Amy to share some of the lessons she drew from this case with the rest of us and she was kind enough to accept. You can also download her appellate brief: APPELLEES' ANSWER BRIEF
I think the first question is whether a devise of homestead is prohibited by Article X, section 4. That question is answered by determining whether the residence did in fact meet the size and contiguity requirements of Article X, section 4, and was the decedent's residence. If the decedent was survived by a spouse and no minor, the only valid devise is a devise to the spouse. If the decedent was survived by a minor, no devise is valid. If there were no minor children and the spouse signed a valid postnuptial or prenuptial waiver, a devise to anyone is valid. (Kelley's Homestead Paradigm).
The second question is whether the homestead is "protected" homestead, meaning it is not subject to administration, including abatement and payment of creditor claims. A direction to sell, as in the case you reported, blows the "protected" status. Also,a devise to someone who would not be within the class of potential intestate heirs blows the protected status as to that devisee's share.
I think this case shows the dangers of drafting a Florida will by someone who is not an experienced, licensed Florida attorney.
I've also been frustrated recently in handling closings where protected homestead can only be conveyed by the devisees in the will. Often attorneys (and realtors) don't understand that the personal representative has no authority to convey protected homestead.
This is a tough issue, so thanks for bringing the case to our attention.
I came across The Florida Probate and Trust Litigation Blog a few months ago. I find it consistently well-written and thoughtful. Thank you for taking the time, Mr. Antunez.