Florida Homestead Property – The Basics
Florida's Homestead protections are actually three distinct protections beneath Florida law, each with a different purpose and impact: asset protection, reduced property taxes, and protection of surviving spouses and minor children. Every is explained below.
The Florida Constitution exempts homestead property from levy and execution by most creditors. Thus long as the property qualifies as homestead, the number that can be protected is not restricted, that makes the Florida Homestead an excellent asset protection vehicle. Whether or not the purchase of the homestead was designed to defeat creditors, the protection still applies.
Underneath 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 $125,000, unless the debtor occupied the Florida homestead property and previous Florida homestead properties for 1215 days previous to the bankruptcy filing. Also, transfers into Florida Homestead within 10 years supposed to defraud creditors may be challenged by the bankruptcy trustee.
Federal creditors, like 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 a rise of no more than three% per year.
If a Florida resident passes away owning a Florida Homestead in their own name, if the resident had minor children, the minor children are entitled to the whole property, or, if the resident was married, to at least a remainder interest within the property. A surviving spouse is entitled to a minimum of a life estate in Florida Homestead property. The homestead provisions can be a entice for the unwary, particularly for those with estate plans drafted whereas a resident of another state. For instance, an individual owning a house in New York and a condominium in Florida may have decided, whereas a New York resident, to depart 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 underneath the terms of the can and then be given a life estate within the Florida condominium.
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