Below is the transcript from a recent interview with Kristin Conroy, Board Certified Real Estate Attorney
Jon McLeod: We are here today with Kristin Conroy from Conroy, Conroy and Durant. Thank you for taking the time to listen in see what’s going on here in Southwest Florida. So, Kristin, tell me a little bit about Conroy, Conroy and Durant.
Kristin Conroy: We are a boutique real estate law firm that has been involved in the Southwest Florida market for over 20 years. My brother started it in the early 90s, I’m going to say. I joined him in ’97, and we focus exclusively on real estate related legal matters.
JM: Okay, which is good, because that’s what we’re talking about today. I love that.
JM: It works out really well. Obviously, I sent you some questions to kind of prepare for this, and they’re kind of fun. What makes you unique and stand out in your profession, versus other attorneys that do this?
KC: We have three board certified real estate lawyers, the partners. My brother Tom, my partner Mike Durant and myself are all board certified in real estate law, and it’s the fact that the whole firm focuses on real estate.
KC: We have some phenomenal paralegals and staff that really understand the contracts, really understand real estate, understand the issues that come up day in and day out. So, we can handle most questions that arise.
JM: Now, how common is it to have three board certified attorneys in the same office?
KC: I don’t know of another one locally. There could be, but I don’t know of another one locally that has three.
JM: What do you do to keep learning and progressing in your industry?
KC: Well, of course, the Florida BAR requires continuing legal education requirements. So, all attorneys do that. As a board certified real estate lawyer, there are additional CLE requirements that have to be at a higher level.
KC: So, we meet that, and we go to a lot of seminars, and we teach a lot of seminars. So, that helps us stay on top, when you’re actually having to teach the matters.
JM: Tell me something you’re not good at.
KC: Okay, I love gardening. I am a horrible weeder. I am horrible at weeding my garden. I start out gung-ho, and then weeds somehow take over. So, I have to find my vegetables in the middle of the weeds.
JM: Nice, nice. Well, welcome to Florida. Everything seems to grow, even when you don’t want it to.
JM: Last question, before we get into our topic. You have a choice, your room, desk or car. Which one are you going to clean first?
KC: Home, room, just because I have two big dogs that shed a lot, and it needs a lot more attention.
JM: What kind of dogs do you have?
KC: They’re lab mixes. Adopted them from Lab Rescue, they’re muts, and crazy and fun and a riot.
JM: Excellent, excellent. Very good. Well, I know today we’re going to talk about the advantages or disadvantages of different ways to take title in property. Whether homesteading or owning in a trust is a right mix.
JM: So, why don’t you go ahead and start things off on that.
KC: Well, what I thought is an interesting topic is homestead is really interesting in the state of Florida, and I think it’s more complex than it is in other states. We call it the chameleon of real estate, the chameleon of real estate law.
KC: It changes, but there are many different aspects to it. There is the exemption from for sale by creditors. So, for your homestead property, creditors cannot take your homestead, and if you’re in a municipality, it’s up to a half-acre of contiguous property.
KC: If you are outside of municipality, up to 160 acres of contiguous property.
JM: Okay, so that would be the difference between Naples proper and unincorporated Collier County? Even though it’s still referred to as Naples, once you get north of Pine Ridge, you’re no longer incorporated.
KC: Right. Once you’re outside the city limits, you have up to 160 acres protected from for sale by creditors, and that’s … Judgements don’t attach to your homestead property.
KC: The exceptions are, of course, a mortgage, taxes and association assessments, then people who are doing work on your home. Laborers have the construction lien rights.
JM: Sure, mechanics, liens and that sort.
JM: Is there a limit to the value of property?
KC: No, no. So, that’s why a lot of famous people will end up-
JM: I was going to say, is that why O.J. moved here?
KC: Exactly, exactly, and there are other famous folks that end up buying here, in part, for the protection of the asset.
JM: Is that one of the things that, when you start getting into the luxury market here in Naples, that tends to elevate the pricing more than you would think? Because, it seems like there’s … The property values in Southwest Florida are certainly among the highest in the country, and is that due in part of the homestead laws?
KC: It definitely could be in part due to that. Obviously, it’s throughout the state, and we are a unique community. But, there are also a lot of folks on the East coast that take advantage of this homestead benefit, as well.
KC: So, I think it does play, in part, increasing the values. But, that’s definitely a benefit of homestead, and that’s a benefit that you don’t have to do anything in particular to get that benefit, other than having the present intention of making the property your homestead property.
KC: You don’t have to file anything. You can file a declaration of domicile, but you don’t have to file anything. But, courts are going to look at, if you’re being sued and you’re saying, “Hey, this is my homestead property. It’s exempt.”
KC: You’re going to have to show indicia of your intentions. So, courts are going to look at a whole variety of indicia.
JM: Is that where, you know, your license is …
KC: Driver’s license, voter’s registration … So, they’re going to look at all of these intentions. Where you get your tax bills. If everything points to that being your homestead property, you’re going to have that protection.
KC: That’s different than another benefit, which is your tax exemption. For homestead property, there is a tax … You get $25,000 off your assessed value for all taxes, and then another $25,000 for non-school related taxes.
KC: So, you can have up to $50,000 off your assessed value. To get that, you do have to apply to a property appraisers office, and literally, I’ve had clients ask me, “Can you please go ahead and file this for me?”
KC: And, you have to take it in, in person, and you have to bring the deed and other information showing this is in fact your homestead property.
JM: Now, obviously, we see a lot of homes owned in trust down here. Even, I see a lot of property owned in trust, where the people live in the homes year around. How does that affect homesteading?
KC: Well, you can take title. So, to get homestead status on your property, is either has to be in your individual name, or in a revocable trust, and you have to bring the revocable trust to the property appraisers office for the tax exemption, and show them that you are the beneficiary of it.
KC: So, you can either hold it individually or in trust. Where holding it in trust, for a homestead, gets complicated is that there’s yet another constitutional provision relating to homestead that says for a homestead property, it can only be devised to your spouse, if you’re married …
KC: You can’t devise it to third parties if you are married and have minor children. If you don’t have minor children, you can devise it to your spouse. So, there’s very particular language in the constitution that says how your homestead has to be devised.
KC: The public policy is basically that they want homestead property to be protected from creditors and to stay within the family, basically. So, the difficulty is that people come from another state, they might have a trust that has some … The beneficiary of the trust is another credit shelter trust, and it gets kind of complicated, but they want to protect their assets.
KC: Sometimes that’s held to be not in compliance with the constitutional provisions that provide the homestead property has to go to your spouse and to your minor children.
JM: What if you are a single individual without a spouse or kids? Whether they’re minor kids or adult? Is there any sort of snafu that they could be running into, owning a property in trust and trying to homestead?
KC: Nope, then they can hold it in a trust, and they can devise it in a will, as they would see fit.
JM: So, the individual that’s hoping they have a rich uncle somewhere, actually has an opportunity with that?
KC: Right, you have the rich uncle.
KC: So, sometimes people will put in a trust that property goes to a charity, and that is where, again, people can get into trouble. Is that can be found to be a devise that is against the constitution, and the courts will actually have it go to the spouse or the minor children.
KC: Another kind of quirk that comes up is yet another constitutional provision that says, in order to sell, devise or mortgage property, your spouse has to join in if you’re married, and on homestead property.
KC: So, a lot of times we’ll be involved in a transaction where title is held in one person’s name, and we ask if the person is married, and they say they’re married, and then we say, well, we need to have your spouse join in.
KC: For the most part, that’s not a problem for a lot of people. So, even if title is held individually, if they’re married, and it’s their homestead property, they have to have the jointure of their spouse.
KC: Sometimes people are involved in a divorce and they, “Oh, no. No, no, no, no, no, no. That’s not going to work.”
KC: We have to go through the process, because otherwise it’s a void deal.
JM: So, in a divorce proceeding, let’s say it’s an ugly divorce, and they’re still legally married. At that point, it sounds like both parties need to sign off, even if the arrangement is one is going to get the property. If the divorce has not been settled, is not finalized, both still need to sign off.
JM: That can create some challenges.
KC: It can create some challenges. Exactly.
JM: When is it not advisable to own property in trust?
KC: To me, the only time is when you’re married, and it’s your homestead property. To me, most real estate lawyers, and even probate lawyers, will recommend to title to your homestead as husband and wife, as an estate by the entirety.
KC: That way, upon the demise of the first party, title automatically transfers at the date of the death of the first party, automatically transfers to the spouse, outside of probate. Then, at that point, the person can put title in their trust, then, especially if they don’t have any minor children.
JM: Okay, are there any particular mistakes that you see when taking title, that’s fairly common?
KC: Well, we have people who want to do estate planning in their deed, and instead of doing a will, they want to take title as husband and wife, as to a certain portion of the property, and then for children. That can get very complicated, because you never know what’s going to happen in the future.
KC: You never know if there’s going to be a disagreement with one of your children, and all of a sudden you have to go sell the property, and you have to get everyone’s signatures. Or, you want to go mortgage the property. You want to take an equity line out, and you have to get everyone’s signatures.
KC: So, I see, sometimes people wanting to put everyone in the family on a deed, ends up creating some issues down the road. The other one that comes up is when boyfriend and girlfriend by property together. That can sometimes be an issue, because everything’s going along swimmingly at first, and then there’s a breakup, and you’re talking about splitting cost. You’re talking about both of you have to agree on a purchase price, or a sale price.
KC: So, that sometimes-
JM: It sounds more complicated than if you’re married.
KC: Yeah, yeah. Again, not that, if you’re breaking up, if there’s a divorce and a marriage, that can still get complicated as well.
KC: But, it just seems that, because they are two completely separate individuals, it can definitely get complicated. We’ve sometimes done what’s called a tendency in common agreement, basically. That says, we understand we own the property together, we’re going to share the cost together.
KC: But then, there might be a buyout provision. If one party wants to remain in the property, they can buy the other party out, and how that process goes. So, that is one way to alleviate it, if there’s boyfriend and girlfriend and they come up upon issues.
KC: Well, okay, I’ll buy your interest out, or you buy my interest out.
JM: All right, excellent. Excellent. Well, Kristin, thank you for the time today. I appreciate it.
JM: We’ve been sitting with Kristin Conroy with Conroy, Conroy and Durant. Her number is at the bottom of the screen if you have any questions. Thank you very much for attending, we appreciate it.