2020 Legislative Changes Affecting Real Property, Probate and Trust Lawyers

Here’s a review of some of the changes signed by the Governor of the State of Florida recently.

Real Estate Conveyances

House Bill 469 was signed by the Governor yesterday.  (The Laws of Florida Chapter and Section Number have not been assigned yet.) It removes the requirement of two witnesses for a lease. Previously two witnesses were required for a lease with a term of more than one year.  Title insurance underwriters will likely announce underwriting guidelines on leasehold cooperatives. For estate planning purposes, I’ll probably continue to prepare an assignment of proprietary leasehold with two witnesses since spousal waivers under F.S. 732.702 and F.S. 732.7025 require two witnesses.

Chapter 2020-33 

Leasehold Cooperatives as an Interest in Real Property

The RPPTL homestead committee continues to debate the character of a proprietary leasehold for purposes of the constitutional homestead protections.  Some argue that the common law always treated a leasehold as personal property.  There are several leasehold cooperative cases that treat a leasehold as an interest in real property for purposes of the constitutional homestead protection against creditor claims, both during the owner’s lifetime and when devised to the owner’s heirs at death. Our committee prepared an amendment to Chapter 719, https://www.flsenate.gov/Session/Bill/2020/1154/BillText/c2/PDF which would have added a sentence to the definition of a cooperative unit:

     719. 103. Definitions.

(25) “Unit” means a part of the cooperative property which is subject to exclusive use and possession. A unit may be improvements, land, or land and improvements together, as specified in the cooperative documents.  An interest in a unit is an interest in real property.

The amendment was added to a larger bill for homeowner’s association legislation that was not passed this year.  Hopefully it will be back next year.

There is a pending case in the Florida Supreme Court where the conflict between the cases has been certified.  This will be the fourth time the same question has been certified to the Florida Supreme Court and in each of the prior three cases, the Florida Supreme Court dismissed jurisdiction without answering the question.  Rohan Kelley entered an appearance to file an amicus brief in the current case to argue that you can’t classify a leasehold cooperative as constitutionally protected homestead for some protections, but not others.  Prior cases have accepted the position that "homestead" as defined in Article X, section 4(a) and 4(b) is different that homestead for purposes of Article X, section 4(c). Current real estate practices require us to treat leasehold cooperatives as if they could be considered real property and worry about spousal joinder in deeds and spousal (or minor children’s) homestead rights after the death of the owner.

Partition of Heirs Property

The Uniform Partition of Heirs Property.  The purpose of the Act is to protect heirs who inherit (knowingly or unknowningly) real property that has never been probated.  The RPPTL Section published an article in the Florida Bar Journal which questioned whether the new legislation really added anything to existing partition proceedings. https://www.floridabar.org/the-florida-bar-journal/the-uniform-partition-of-heirs-property-act-a-solution-in-search-of-a-problem/  A prior article advocated for the Act.  https://www.floridabar.org/the-florida-bar-journal/the-disproportionate-impact-of-heirs-property-in-floridas-low-income-communities-of-color/  

 http://laws.flrules.org/2020/55

Errors in Legal Descriptions

The Governor also signed legislation that affects errors in legal descriptions.  It provides a notice that can be recorded if the error in a deed fits within certain criteria.  It is effect July 1, 2020

 http://laws.flrules.org/2020/33 

Estates

Laws of Florida Chapter 2020-67 includes changes affecting wills and estates.  Some changes become effective upon becoming law, others on July 1, 2020, and others on October 1, 2020.  The Probate Rules Committee is working on updates to affected probate rules, but they will not be filed with the Florida Supreme Court for consideration before July 1^st.  The forms committee for FLSSI is also aware of the changes and working to update their forms as quickly as possible.

·         Section 731.1065 is added to include a definition to include precious metals, such as bullion or coins, kept for historical, artistic, collectible or investment purposes  as tangible personal property (effective for all proceedings commenced before, on or after July 1, 2020);

·         Section 731.201(32) is amended to clarify that a cause of action by the decedent is property of the estate and therefore within the authority of the personal representative (effective October 1, 2020);

·         Section 731.301(2) is amended to confirm that formal notice is sufficient to exercise in rem and quasi in rem jurisdiction, but not personal jurisdiction over the person served with formal notice (effective upon becoming law);

·         Section 733.212 is amended to require two new items in the Notice of Administration.  (1) the surviving spouse’s deadline to file an election elect an elective share can be extended under 732.2135(2); and (2) a notice that the failure to contest a pour-over will can result in being barred from contesting the trust or other writing incorporated by reference into the will. (Effective October 1, 2020) 

·         New language has been added to Section 733.610 to extend conflicts of interests for a personal representative to a sale or encumbrance involving the personal representative’s spouse, agent or attorney. (Effective July 1, 2020)

·         Section 733.617 has been amended to require written disclosure to a testator when the will designates the drafting attorney, including another attorney in the same firm or someone related to the attorney or an attorney in the same firm, as a personal representative. (It is effective October 1, 2020.) Without the proper disclosure, the attorney or related person is not entitled to compensation.  This was previously addressed by an updated comment to Rule 4-1.8 of the Rules Regulating the Florida Bar in 2017. (Effective October 1, 2020)

·         Section 736.0708 is the Trust Code version of 733.617 for drafting attorneys or related persons being designated as trustee. This was previously addressed by an updated comment to Rule 4-1.8 of the Rules Regulating the Florida Bar in 2017. (Effective October 1, 2020)

The text of the probate changes can be found at: http://laws.flrules.org/2020/67

 

New Florida Residents Who Don't Update Estate Planning Documents May Leave a Costly Problem When Estate Planning Documents Are Needed

Florida residents must have their planning documents reviewed when they become Florida residents. Even though a new Florida resident may have a long-standing relationship with their attorney in another state, they should never have their documents revised, created or updated by anyone who is not licensed to practice law in Florida.

Florida law requires that certain documents signed by a Florida resident be signed in the presence of two witnesses:   wills, revocable trusts, prenuptial or post nuptial agreements, and powers of attorney (if the power of attorney will be used for the homestead residence.)  This applies even if the original documents were signed by someone when they were not yet a Florida resident.

The test is the state of residence at the time the document is signed.  If you are a Florida resident and sign any of these documents in another state, Florida law still requires two witnesses, even if the state where you sign does not.  It may seem like you're saving money by going back to your out-of-state attorney, but you could be paying for documents that are worthless.  Even worse, the problem may not be discovered until it's too late to correct the problem.

In addition, Florida law has strong protections for a surviving spouse. The test here is whether the first spouse to die was a Florida resident at the time of death.  The place where documents were signed doesn't make the document valid if the person was a Florida resident at the time of signing. The surviving spouse's rights are based upon Florida law even if the marriage occurred outside Florida, or the surviving spouse was not a Florida resident at the time of the first spouse's death.