Florida’s Homestead protections are literally 3 distinct protections under Florida law, each with a completely different purpose and result: asset protection, reduced property taxes, and protection of surviving spouses and minor children. Each is explained below.
The Florida Constitution exempts homestead property from levy and execution by most creditors. Thus long because the property qualifies as homestead, the number that can be protected is not restricted, that makes the Florida Homestead an glorious asset protection vehicle. Whether or not the acquisition of the homestead was designed to defeat creditors, the protection still applies.
Under the Bankruptcy Reform Act of 2005, however, debtors in bankruptcy could lose all or a portion of the homestead protection. In bankruptcy, homestead protection is capped at $one hundred twenty five,000, unless the debtor occupied the Florida homestead property and previous Florida homestead properties for 1215 days prior to the bankruptcy filing. Conjointly, transfers into Florida Homestead inside 10 years intended to defraud creditors could be challenged by the bankruptcy trustee.
Federal creditors, such as the Internal Revenue Service, mortgage holders, and persons holding mechanics liens on Florida homestead property don’t seem to be restricted by the Florida homestead provisions.
Under Florida’s Save Our Homes Act, the assessed value of a Florida Homestead is restricted to a rise of not more than 3% per year.
If a Florida resident passes away owning a Florida Homestead in his or her own name, if the resident had minor youngsters, the minor children are entitled to the complete property, or, if the resident was married, to a minimum of a remainder interest in the property. A surviving spouse is entitled to at least a life estate in Florida Homestead property. The homestead provisions can be a entice for the unwary, especially for those with estate plans drafted whereas a resident of another state. As an example, an individual owning a house in New York and a condominium in Florida might have decided, while a New York resident, to leave the house to his spouse and his condominium to a daughter from a first marriage. If the person retires to Florida as a resident and then passes away, his spouse can inherit the house beneath the terms of the can and then be given a life estate within the Florida condominium.
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