Tips to Title Property in Florida for Estate Planning and Investment Properties

If you’re a married couple in Florida owning multiple properties, like two condos—one in both spouses’ names and another in just one spouse’s name—you may be wondering how to properly title these properties to align with your financial and estate planning goals. This decision can impact homestead exemptions, probate avoidance, liability protection, and tax implications. In this article, we’ll explore key considerations for titling condos, including homestead properties, second homes, and investment properties like Airbnbs, to help you make informed decisions. Always consult an experienced real estate or estate planning attorney in Florida to tailor solutions to your specific situation.

Tips to Title Property in Florida for Couples

When deciding how to title your property condos, several factors come into play, such as whether the property is your primary residence (homestead), a second home, or an investment property. Each scenario has unique implications for taxes, liability, and estate planning. Below, we break down the main considerations.

1. Homestead Property: Should Both Spouses Be on the Deed?

If one of your condos is your homestead property (your primary residence in Florida), it’s generally advisable to have both spouses’ names on the deed. Here’s why:

• Homestead Exemption Benefits: In Florida, homestead properties qualify for significant tax exemptions, including a reduction in property taxes and protection from certain creditors. Both spouses can claim the homestead exemption, which can maximize tax savings.

• Estate Planning Simplicity: Having both spouses on the deed ensures smoother transfer of ownership upon one spouse’s passing. For example, titling the property as tenants by the entirety (a common form of ownership for married couples in Florida) allows the surviving spouse to automatically inherit the property without probate.

Action Step: If your homestead condo is only in your husband’s name, consider adding yourself as a co-owner via a quitclaim deed or as a life tenant to ensure both spouses benefit from homestead protections and to streamline inheritance.

2. Second Home: Estate Planning for Future Generations

If the second condo is a second home (not a rental or investment property), your goal may be to pass it down to children or other beneficiaries without going through probate. Here are two effective strategies:

• Lady Bird Deed: A Lady Bird deed (also called an enhanced life estate deed) allows you to retain control of the property during your lifetime while designating beneficiaries who will inherit it upon your passing. This avoids probate, saving time and legal costs. For example, you could name your children as beneficiaries, ensuring the condo transfers directly to them.

• Revocable Living Trust: Placing the condo in a trust allows you to control the property during your lifetime and designate how it’s distributed after your death. Trusts also avoid probate and provide flexibility if your plans change.

Action Step: If the second condo is only in your husband’s name, consult an estate planning attorney to explore adding your name to the deed or transferring the property into a trust or Lady Bird deed to ensure it passes to your intended beneficiaries outside probate.

3. Investment Property: Liability and Tax Considerations

If one or both condos are investment properties (e.g., rentals or Airbnbs), the titling decision becomes more complex due to liability and tax implications. Here’s what to consider:

Liability Protection for Rentals and Airbnbs

Owning an investment property in your individual name(s) exposes your personal assets to liability risks. For example, if a tenant or guest sues due to an incident at your Airbnb, they could target your personal assets, including other properties or savings.

• Limited Liability Company (LLC): Titling the condo in an LLC shields your personal assets from lawsuits related to the property. If a dispute arises, only the LLC’s assets (the condo itself) are at risk. For short-term rentals like Airbnbs, this is especially important due to the higher likelihood of disputes from frequent guest turnover.

• Trust for Probate Avoidance: You can combine liability protection with probate avoidance by having a trust own the LLC. This setup ensures the property passes to your beneficiaries without probate while maintaining liability protection.

Challenges with LLCs:

• Some homeowners’ associations (HOAs) in Florida restrict LLC ownership, so check your condo’s HOA rules.

• Certain lenders may not allow LLCs to hold title without triggering a “due on sale” clause in the mortgage. Consult your lender before transferring the property.

• Transferring a property to an LLC may incur documentary stamp taxes in Florida, calculated based on the outstanding mortgage balance. For example, if the mortgage is $200,000, the tax (at $0.70 per $100) would be $1,400, plus a small recording fee (~$30). While this cost may seem high, the liability protection often outweighs it for investment properties.

Tax Implications

• Property Tax Reassessment: Transferring a condo from individual ownership to an LLC may trigger a property tax reassessment, potentially increasing your tax bill. Check with a real estate attorney to weigh this cost against liability benefits.

• Homestead Exemption Loss: If the condo is currently homesteaded but becomes a rental, you’ll lose the homestead exemption, increasing property taxes.

Action Step: For the condo in your husband’s name, if it’s an investment property, consider transferring it to an LLC for liability protection. Work with a real estate attorney to navigate HOA rules, mortgage terms, and documentary stamp taxes. If probate avoidance is also a goal, explore setting up a trust to own the LLC.

Specific Scenarios for Your Condos

Based on your situation—owning one condo in both names and another in your husband’s name—here are tailored recommendations:

1. Condo in Both Names (Likely Homestead):

   • If this is your primary residence, keep both names on the deed to maximize homestead benefits and ensure automatic transfer to the surviving spouse via tenants by the entirety.

   • For estate planning, consider a Lady Bird deed or trust to pass the condo to beneficiaries (e.g., children) outside probate.

2. Condo in Husband’s Name (Second Home or Investment):

   • If a Second Home: Add your name to the deed as a co-owner or life tenant to align with estate planning goals. Alternatively, transfer the condo to a trust or use a Lady Bird deed to designate beneficiaries.

   • If an Investment Property: Transfer the condo to an LLC for liability protection, especially if it’s a rental or Airbnb. Consult an attorney to handle documentary stamp taxes and ensure compliance with HOA and lender rules.

     
     

Why Consult a Florida Attorney?

Titling decisions for condos in Florida involve nuanced factors, including:

• HOA Restrictions: Some condos prohibit LLCs or certain trusts.

• Mortgage Terms: Transfers to LLCs or trusts may require lender approval.

• Tax Implications: Documentary stamp taxes and property tax reassessments can add costs.

• Estate Planning Goals: Ensuring properties pass outside probate requires careful planning.

An experienced real estate attorney or estate planning attorney in Florida can evaluate your specific scenario, including mortgage details, HOA rules, and your long-term goals (e.g., passing properties to children, minimizing taxes, or protecting against liability). They can also prepare deeds correctly to avoid unintended consequences, such as tax penalties or probate complications.

Next Steps for Florida Couples

To decide how to title your two condos, follow these steps:

1. Assess Each Condo’s Purpose: Determine if each condo is a homestead, second home, or investment property (e.g., rental or Airbnb).

2. Review Current Ownership: Confirm whether the condo in your husband’s name should include you for homestead or estate planning purposes.

3. Consult an Attorney: Work with a Florida real estate or estate planning attorney to explore options like quitclaim deeds, LLCs, trusts, or Lady Bird deeds. If you’re in Florida, firms like Cos Law Office specialize in these matters and can provide tailored advice.

4. Evaluate Costs: Factor in documentary stamp taxes, recording fees, and potential property tax reassessments when transferring titles.

5. Monitor HOA and Lender Rules: Ensure any title changes comply with your condo’s HOA and mortgage terms.
   

Conclusion

Titling condos in Florida as a married couple requires careful consideration of homestead exemptions, probate avoidance, liability protection, and tax implications. For your homestead condo, keeping both spouses’ names on the deed maximizes benefits, while a second home or investment property may benefit from a trust, Lady Bird deed, or LLC. Given the complexities of probate and legal matters, consulting a qualified attorney is essential to avoid costly mistakes and align with your goals.

Disclaimer: This article is for informational purposes only and not legal advice. Always consult a licensed attorney for personalized guidance.