Many people ask what is the best way to hold title to their home. Often they are asking because they believe that there will be a time soon when they cannot live safely on their own. If a move to an independent or assisted living facility is foreseeable, you should examine how the title to your property is held.
The first step is to double check the public records. Collier and Lee counties have easily accessible search engines on-line to enable you to make this check at no charge. You may find that your deceased spouse is still listed on the deed. Or you might find that you changed the title to a living trust, which may no longer suit your needs.
Once you have determined how title is held now, you will need to consider how you wish for it to be held. The simplest way is to hold it in your name alone, or with your spouse as a “tenancy by the entireties.” This will allow you to get the maximum protection under Florida’s homestead laws. You get the homestead tax deduction and will be eligible for “Save our Homes” which is a cap on the rise in assessed value of the property.
Some people desire to hold title to property with their children’s names on the property, as “joint tenants with rights of survivorship.” This designation means that the death of one of the title holders vests the ownership of the property in the remaining title holders. Some people believe that this will help to “avoid probate.” It may or may not, depending on how your other assets such as bank accounts and brokerage accounts are titled. However, you begin to get into a gray area for the protection of the title. The property appraiser may question whether the full value is subject to the homestead exemption and Save our Homes, or only a portion. You also risk the property being claimed by the co-owner/children’s creditors, including divorcing spouses.
Another way to title property is in a Trust. This can be a revocable or irrevocable trust. The difference is the irrevocable trust cannot usually be terminated, although it can often be amended. Here again you run into the issue of whether you have homestead protection. There are many types of trusts which apply to different needs. You should always have good legal advice before using a trust to hold title to your real property.
Another type of ownership is an “enhanced life estate deed”, which is also known as a “Lady Bird deed.” This type of deed keeps the current title in your name, while allowing you to name who should take title when you are deceased (the “remaindermen”). You can retain the right to change the remaindermen, or to sell the property without requiring their signatures. You can even retitle it in your own name at some future date if that suits your needs better. Since you retain 100% of the title in your name, your homestead rights and Save our Homes are still protected. However, title companies now require the remaindermen to join in a sale or mortgage of the property. If the family is all still getting along, this may be a minor inconvenience of collecting the various signatures. If the family is quarreling this can be a serious problem involved with somehow compelling an unwilling signature.
Other people ask about the advisability of deeding directly to their children, to “protect” the home from Medicaid (should they need nursing home care.) This is the very worst move they could make. The homestead law protects the home from Medicaid and against a Medicaid lien, as long as the homeowner has a desire to return home if their health allows. Therefore it may be better to keep the title in your name even if you need to enter a nursing home. Or it might be a good time to utilize one of the specially designed trusts to hold the title. Making the transfer to the child or children’s names may incur an “ineligibility period” for Medicaid, and force you to spend your own assets for nursing home care. Remember that Florida now has a five-year “look-back” period for transfers, so any transfers to children will need to have been completed five years before applying for Medicaid.
If you are in doubt, it is best to consult with a professional who is aware of the various legal ramifications. Your professional should also be aware of the workings of the VA and Medicaid programs and the allowable exclusions.