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Dear Mr. Feichthaler:
After going through this hurricane, I have decided to give my house to my daughter, who currently rents in Fort Myers. I may keep living in the house, but I just don't want the hassle of home ownership anymore. Should I just deed her the property?
-- Patricia D.
Dear Patricia:
The challenges the aftermath of Hurricane Ian has brought can seem overwhelming at times. The repairs, the insurance, the constant calls or "drop-ins" by unknown contractors can take its toll on our patience. However, there are many issues to consider before deeding a property to a family member.
First, it is likely you are homesteaded in your property. This designation can lead to hundreds, even thousands of dollars of property tax savings annually. When you transfer the property, any of the "save our homes" savings that have accrued over the years will be lost, leading to higher property taxes in future years. Additionally, if you have a loan on the property, the transfer can lead to two significant issues. First, the transfer may result in a default of your mortgage, which could lead to a higher interest rate and even foreclosure. Also, the state will look at the transfer, even if nothing was paid, as if the amount of the mortgage was paid for the house. The transfer tax, or "Documentary Stamp" tax as it is referred to in Florida, would apply. Depending on the size of the mortgage, this could cost thousands as well.
Also, with the property in your daughter's name, she will have total ownership and control of the property, and will possess the ability to sell the property, and keep the proceeds. Depending on your relationship and family dynamic, this could also lead to stress and serious financial losses.
Also, certain types of deeds can invalidate the title insurance policy you acquired when you purchased the property.
Correcting or reversing real estate transactions can be very expensive, therefore I recommend contacting a real estate attorney prior to proceeding with the proposed transfer.
I wish you and your family a Happy Thanksgiving!
Eric P. Feichthaler has lived in Cape Coral for over 35 years and graduated from Mariner High School in Cape Coral. After completing law school at Georgetown University in Washington, D.C., he returned to Southwest Florida to practice law and raise a family. He served as mayor of Cape Coral from 2005-2008, and continues his service to the community through the Cape Coral Caring Center, Cape Coral Museum of History, and Cape Coral Kiwanis. He has been married to his wife, Mary, for over 20 years, and they have four children together. He earned his board certification in Real Estate Law from the Florida Bar. He is AV Preeminent rated by Martindale-Hubbell for professional ethics and legal ability, and is a Supreme Court Certified Circuit Civil Mediator. He can be reached at eric@capecoralattorney.com, or 239-542-4733.
This article is general in nature and not intended as legal advice to anyone. Individuals should seek legal counsel before acting on any matter of legal rights and obligations.