Florida's Homestead protections are actually three distinct protections under Florida law, each with a different purpose and effect: 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. So long as the property qualifies as homestead, the amount that can be protected is not limited, which makes the Florida Homestead an excellent asset protection vehicle. Even if the purchase of the homestead was designed to defeat creditors, the protection still applies.
Under the Bankruptcy Reform Act of 2005, however, debtors in bankruptcy may lose all or a portion of the homestead protection. In bankruptcy, homestead protection is capped at $125,000; unless the debtor occupied the Florida homestead property and previous Florida homestead properties for 12-15 days prior to the bankruptcy filing. Also, transfers into Florida Homestead within 10 years intended to defraud creditors may 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 are not restricted by the Florida homestead provisions.
Property Tax Protection
Under Florida's Save Our Homes Act, the assessed value of a Florida Homestead is restricted to an increase of no more than 3% per year.
Protection of Surviving Spouses and Minor Children
If a Florida resident passes away owning a Florida Homestead in his or her own name, if the resident had minor children, the minor children are entitled to the entire property, or, if the resident was married, to no less than a remainder interest in the property. A surviving spouse is entitled to no less than a life estate in Florida Homestead property.
Under a recent revision to the Florida Homestead Statutes, a surviving spouse can now elect to receive a tenant in common interest in the homestead instead of the life estate.
To learn more about the Florida Homestead protections, please contact Florida Law Firm Clark Skatoff, PA, at 888-752-8633.
Contact Us » Meet Our Attorneys »