By law a homestead creates a life estate. A life estate is defined as use of the property by the person creating the life estate for the remainder of their life and then passing on to the heirs or decedents (remaindermen). The creator of the life estate does not have the authority to dispose of the property. A homestead creates a life estate. Example:
If a husband applies for homestead then his wife and decedents become owners of the property as the “remaindermen”. The wife can choose, upon the husband’s death, to make an election to divide the property with her having one half interest and the descendants equally divided interest in the other half. This election must be made within 6 months of the passing of the husband.
Creating the homestead/life estate therefore creates ownership of the real property for the wife and decedents. Therefore a homestead property does not need to be probated as the ownership passed upon the death of the husband.
Note: The tax basis for the property is set at the time the creator for the life estate passes. While providing a pre-determined chain of ownership it also allows for the tax basis to be set at the time of the passing. If the husband had deeded ownership to the wife and decedents well prior to his passing the tax basis would have been set at the value of the property at that date. Now years later the decedents want to sell the property. They could be facing a big capital gains tax bill due to the appreciation of the property over many years.