Supreme Court Justice Faced Attack By Some Over Non-Issue Involving Homestead Tax Exemptions For Florida Property

In Broward County, Florida, the South Florida Sun Sentinel reports:

• Political bloggers are demanding an investigation of property tax exemptions that U.S. Supreme Court nominee Sonia Sotomayor’s family receives on a condo in Margate. But local officials say there is no problem. At issue is whether Sotomayor’s mother and step-father are entitled to a homestead exemption after deeding their home to her eight years ago. Property Appraiser Lori Parrish is maintaining that state property tax law allows residents to create life estates and keep their tax breaks for the rest of their life.

• Parrish and the web site, webofdeception.com, have traded e-mails over the propriety of the tax breaks and access to the family’s tax records for two weeks. The site’s operator, private investigator Joseph Culligan, is now threatening to ask a judge to demand a review,(1) and his reports have been picked up on a couple of other blogs.

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• Debra Boje, a law partner in Ruden McClosky’s estate planning division, and Jennifer Drake, a lawyer who heads up the real estate division at the Becker & Poliakoff law firm, said the Sotomayor family used an extremely common estate planning technique in Florida. Such a life estate guarantees seniors keep their tax breaks while also simplifying the inheritance process, they said. “Really and truly, Judge Sotomayor is entitled to the property only upon the death of the life estate owners,” Drake said.

For the story, see Sotomayor family tax breaks in Broward face questions.

(1) Rather than demanding a judge to review this matter, Mr. Culligan would be well advised to first familiarize himself with Section 196.041 of the Florida Statutes. Subsection (2) of the statute provides:

• "A person who otherwise qualifies by the required residence for the homestead tax exemption provided in s. 196.031 shall be entitled to such exemption where the person's possessory right in such real property is based upon an instrument granting to him or her a beneficial interest for life, such interest being hereby declared to be "equitable title to real estate," as that term is employed in s. 6, Art. VII of the State Constitution; and such person shall be entitled to the homestead tax exemption irrespective of whether such interest was created prior or subsequent to the effective date of this act."

See also Rule 12D-7.009(1), Florida Administrative Code, stating that a life estate will support a claim for homestead exemption.

The Florida law on homesteads has acquired some notoriety over the years as a result of a myriad of stories about those seeking to abuse it (whether it be those seeking to dodge payment of real estate taxes, or wealthy people in financial trouble seeking to protect their cash assets by purchasing a homestead within the state, thereby putting said assets out of the reach of their hotly-pursuing, frustrated creditors). This is not one such story.