• Fri. May 13th, 2022

Other voices l To do or not to do | Columnists

‘How can I change the title of my property?’ “How to prepare my act? “I want to add my spouse, child, etc. to my deed.” These are all excellent questions that taxpayers often ask our Customer Service Department.

What an act can one ask for? Cornell Law defines a “deed” as a legal document that grants its holder ownership of real estate or other assets (law.cornell.edu/wex/deed). Ownership on a deed is a very important thing to understand when it comes to owning a property.

Unfortunately, the employees of the Citrus County Office of Real Estate Appraisers cannot tell you how you should handle transferring a document or what type of property you should choose. However, we can try our best to explain the difference between a few of them. We always recommend that you seek professional advice from a lawyer, paralegal, title company, etc. of your choice.

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We see a lot of ‘do it yourself’ acts come through our office and while it’s fine to do, sometimes you may not be fully aware of the property you just listed. . The change in ownership may jeopardize any exemptions or Save Our Homes (SOH) protection you may have had. This means an increase in your tax bill for you, and it can lead to many different legal issues that you might not expect. Once this document is filed in the Citrus County Clerk’s office, it can be quite the process of correcting a mistake you didn’t know you were making. Leaving a simple ownership type at the end of the name, not giving away how you originally held the title, misspelling a name, etc. are all ways that can cause problems that you don’t want.

Remember, please seek professional help before preparing your own act. Here are simplified examples of different ownership types and scenarios. Hope this gives you a basic understanding of property types.

The first type of ownership is “Tenants in Common (TIC)”. Each of the owners owns a share of the property, which can be sold separately. Florida law assumes equal ownership interests unless specific percentages are written into the registered deed. Example: “To Bill Johnson and Mary Smith” would give Bill and Mary 50% ownership each. Under TIC, if only one of the owner’s two files for homestead, the property would get 100% of the $25,000 homestead exemption, but only 50% (the amount owned by whoever filed) of the value taxable is protected by the SOH ceiling.

The second type of ownership is “Tenants by Entirety (TBTE)”. This only applies to married couples, who must be identified in the deed as “a married couple”. This TBTE status – which is automatic when this language is indicated – gives each spouse 100% overlapping interests, full exemption coverage (when a case is filed) and rights of survivorship. This interest automatically converts to TIC status when the divorce is finalized (unless or until ownership is transferred to one of the spouses pursuant to the divorce settlement or court order).

The third type of ownership is “joint tenants with right of survivorship (JTRS)”. This gives two or more unmarried co-owners legal rights to ownership. Example: “To Mark Wright and Bill Johnson, as co-owners with right of survivorship. The JTRS co-owners would each hold 100% overlapping interests – and any owner applying for ownership would be eligible for 100% ownership and SOH coverage. When a JTRS co-owner dies, all remaining ownership rights are automatically distributed among the living JTRS co-owner(s).

The fourth type of property is “Life Estate (LE)”. This is the current interest to use a property for life, but leaves the residual interest (i.e. title after the life estate holder dies) to one or more future owners. Example: “To Mary Smith for her life, the remainder to her sons Bill Johnson and Steve Johnson.” Mary (the life estate holder) is the only person eligible for home ownership during her lifetime. It is also possible to create undivided life assets allowing several people to have full rights to use the property at the same time (example: an elderly couple keeps undivided life assets before leaving the remainder to their child) .

The fifth type of property is a “trust”. Transferring ownership of a homestead to a trust (revocable, irrevocable, land trust, etc.) is another common way to maintain homesteading on a property while avoiding probate and making the most of federal tax laws. . However, as these are rather complex to establish properly – in the sense that the trust must be formally created before ownership of the property is transferred to the trust.

Finally, partnerships, limited liability companies and corporations. You will lose your homestead exemption (or may not qualify for homesteading) if your property is transferred to a partnership, LLC or other corporation. Florida courts ruled that these entities were simply not eligible to qualify for the farm. See: Prewitt Management Corp. v. Nikolits, 795 So.2d 1001 (Florida 4th District Court of Appeals, 2001).

Cregg Dalton is the Citrus County real estate appraiser. Email him at [email protected]