Marriage Penalty Removed for Conveyances Between Spouses

toates Estate Planning, Probate Estates, Real Estate

Question: My wife and I purchased a property before we were married. How can we protect the property now that we are married in case something happens to one of us?

This is a question that we are asked frequently by our clients. Married couples in the State of Florida take title to property as tenants by the entireties (TBE). The generally accepted language for taking title is “John Doe and Jane Doe, husband and wife.” Under Florida Law this implies TBE and offers the protections from creditors of one or the other spouse in addition to constitutional protections if the property is a principal residence.

When you purchase a property prior to marriage you take title as co-tenants (similar to a partnership). The default language for taking title between non-spouses is “John Doe and Jane Doe” or “as co-tenants.” Under Florida Law this assumes each owns fifty percent of the property. This has certain implications for survivorship and devise, especially if the heirs of each of the co-tenants is not the same. There are other ways to hold title between non-married individuals such as “joint tenants” which are outside the scope of this article.

In Florida, we have no State income tax, but we collect other taxes such as sales and use tax and conveyance taxes on the transfer of real property; called documentary stamp taxes (also referred to as doc stamps). These doc stamps are calculated on the consideration of the transfer or the amount of any mortgage or other indebtedness encumbering the property.

Prior to July 1, 2018, a married couple could correct the title to property to reflect their holding title as a married couple (TBE) without a conveyance tax, if the transfer was done within one year of the marriage. Outside of that, there was the potential for doc stamps on the consideration.

Recently, the Florida Legislature has fixed this “marriage penalty” by allowing a married couple to transfer property between themselves without doc stamps. Seems fitting since there was already an exemption for transfer tax subsequent to a dissolution of marriage. Real estate law practitioners had been lobbying the legislature to make this fix for many years. If you want to read the specifics you can review Section 201.02, Florida Statutes (2019).

A real estate attorney is your friend when it comes to issues like this. There are too many ways to create inadvertent title issues with the use of an online or office supply store form. Rarely do the forms give accurate advice to make sure your conveyance conforms with Florida Law. If you need help with fixing the title to your property to make sure it reflects a subsequent marriage, please get it touch with our office.

This article is one in a series based on questions we frequently get from our clients. It is accurate as of the date of publication, however the law changes. You should rely on the advice of a knowledgeable attorney in order to make sure you are getting the most up to date information.