On January 6, 2015, same sex marriages became legally recognized in Florida. With the new legal benefits afforded to same-sex couples, come questions regarding their financial planning, estate planning and property ownership. The question: “Should we now amend title to our jointly owned properties from ‘joint tenants with rights of survivorship’ to ‘tenants by the entireties’ ?” The answer to that question hinges on various factors including how the couple manages their finances. For purposes of this discussion, we will assume a couple has been issued a marriage license, was married, and is co-mingling assets, funds, bank and brokerage accounts and personal property.
Under Florida law, when a married couple purchases real property, title is taken as “John Smith and Mary Smith, husband and wife” which creates a tenancy by the entireties. The effect of this status of title is such that when one of the two spouses dies, title transfers automatically to the surviving spouse without the need of a probate proceeding. With same-sex couples, prior to their marriages being legally recognized, title was often vested as “Frank Smith, a single man and Tim Smith, a single man, as joint tenants with rights of survivorship.” This titling of real property resulted in a similar benefit as a tenancy by the entireties in that when one partner died, the surviving partner would receive the real property without the need of probating the deceased partner’s estate. Generally, recording a copy of the death certificate in the public records of the County where the real property is located would be sufficient to place parties on notice that title was now vested solely in the surviving partner.
While the legal benefits to same-sex couples has increased, there remain many legal issues regarding title to real property and how to treat same-sex couples who are married. Because the legal challenges to the law are still ongoing, title underwriters insuring real estate transactions in Florida have remained cautious and conservative in their approach to insuring title to real property for same-sex couples. While same-sex couples may want to reflect their marital status in the title to their real property, i.e. Frank Smith and Tim Smith, a married couple, same-sex couples should consider erring on the side of caution and maintaining joint tenancy language in their titles to avoid any potential legal issues down the road, including probate. Further, the application to each county’s property appraiser/comptroller, for purposes of homestead recognition, should be done by both parties in order to avail themselves of the Save Our Homes tax exemptions, assuming that the real property under consideration is their primary homestead property.
While the legal challenges are fought in courts, same-sex couples can avail themselves of many legal benefits the recognition of their marriage brings. However, when buying real property and figuring out how to title it, same-sex couples should consider obtaining legal advice so that the many aspects of real estate ownership can be discussed and addressed. In this case, it is not a “one size fits all” option.