Florida_Homestead_Property_-_The_Basics by MarijanStefanovic


Florida Homestead Property - The Basics

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Florida Homestead property is one of the most misunderstood parts of
Florida law. The article gives the basics of Florida Homestead property.

Florida Homestead

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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 prote ction. In bankruptcy,
homestead protection is capped at $125,000, unless the debtor occupied
the Florida homestead property and previous Florida homestead properties
for 1215 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.

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.

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.
The homestead provisions can be a trap for the unwary, especially for
those with estate plans drafted while a resident of another state. For
example, a person owning a house in New York and a condominium in Florida
may 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
will inherit the house under the terms of the will and then be give n a
life estate in the Florida condominium.

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