Question 1

What is an owelty deed?

Accepted Answer

An owelty deed is a deed used to equalize the division of property. When property is divided between co-owners and one party receives a greater share, the owelty deed creates a lien on the property to secure the payment owed to the other party. Common uses: divorce (when one spouse retains the marital home and owes the other spouse their share of the equity, the owelty deed secures that obligation), partition (when co-owners divide property and one owner’s share is larger, the owelty deed equalizes the division), and inheritance (when heirs divide inherited property unequally).

Question 2

How does an owelty deed work in Florida?

Accepted Answer

Florida mechanism: the party receiving the larger share executes an owelty deed in favor of the other party. The deed creates a lien on the property (similar to a mortgage) securing the amount owed. The lien is recorded in the official records, giving constructive notice to future purchasers and lenders. The party who owes the equalization payment: pays the amount owed according to the agreed terms (lump sum or installments), and the owelty lien is released when the payment is made in full.

Question 3

What are the advantages of an owelty deed in Florida divorce?

Accepted Answer

Divorce advantages: the owelty deed allows one spouse to keep the marital home while compensating the other spouse for their share, the lien secures the payment obligation (protecting the spouse who is owed money), the deed can be used to refinance the property (the owelty lien can be structured to work with a refinance), and the transfer may qualify for tax-free treatment under IRC Section 1041 (transfers between spouses incident to divorce are tax-free). The owelty deed provides a practical solution when the retaining spouse cannot immediately pay the other spouse’s share.

Owelty Deed

Owelty Deeds in Florida

Common Uses

How It Works

Divorce Advantages

Related Terms

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