Does Homestead Exemption Apply To Child’s Remainder Interest When Parent Retains Life Estate In Parent’s House?

Often, parents will put their children on titled to their Florida homestead to facilitate title transfer upon the parent’s death as part of “do it yourself” estate plan. Sometimes the parents add children on the title as joint tenants with rights of survivorship. Other parents transfer the title of their residence to their child’s name and reserve a life estate so the parent can remain in the home as long as they are alive. In the latter case, the parent holds the life estate, and the child owns what is known legally as a “remainder interest” in the house, that is, the child owns what “remains” after the life of the parent. A few days ago a clients asked me if his remainder interest in his parents homestead was exempt from the client’s own judgment creditors under Florida’s homestead exemption.

The answer depends upon whether the child/debtor occupies the house with the parent. The Florida Supreme Court held that a creditor’s judgment attaches as a lien to a child’s remainder interest in the parent’s homestead where the child does not live in the house until after the expiration of the parent’s life estate and where the child’s creditor gets a judgment while the parent is alive. The Supreme Court said that a debtor with nothing more than a remainder interest subject to his parent’s life estate lacks the right of possession necessary for the Constitution’s homestead exemption.

A recent bankruptcy case had a different result where the facts were different. In the bankruptcy case, the debtor lived with the elderly life estate holder, provided daily care, and he helped maintain the house. The debtor did not have a separate residence. The bankruptcy court held that the homestead analysis does not turn on a strict legal interpretation of a “remainder interest.” The exemption for the holder  of a remainder interest depends upon facts concerning the debtor intent to make the property his homestead and the debtor’s actual use of the property as his principal and primary residence. Case No. 10-40232, Tallahassee Division


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Jon Alper is an expert in asset protection planning for individuals and small businesses.

Jon Alper

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