Florida Homestead is protected against collectors | Opinion columnists
Most people know that Florida offers special tax treatment for homesteads. ON more important To use Power being Florida Constitution Protection against creditor claims. Article X, Subsection 4 provides that Florida real estate is exempt from foreclosure in court and that no judgment can constitute a lien on the property except for the payment of taxes and duties on the property, contractual obligations to purchase, Improvement or repair of the homestead or contractual obligations HHouse, field or other work that is done on the homestead. Homestead ownership is limited to one–half an acre within city limits and 160 acres of contiguous land outside of a city.
Homestead is the place of residenceThat of the owner or the owner family. The constitution provides that the exemption passes to the surviving spouse or heirs of the owner so that creditors cannot reach the homestead which passes to a surviving spouse or heir from submission a claim with the estate of the testator. If the homestead does not pass to the spouse or heirs of the owner, it is subject to the claims of the creditors like any other estate.
Florida courts explain the purpose of indemnifying the homestead from creditor claims is Protection of the family from make sure the owner the Homestead is not going to lose its home to creditors problems. That Florida public policy is to protect this most important asset and to prevent individuals from becoming wards of the state. C.Editors can be harmed, but the general public benefits, and it is believed to be in Florida’s best interests.
Lots try to escape the clutches of the creditorsS. to have touched to Florida and useD. their cash to buy a home in Florida. Florida courts have protected these purchases from claims by creditors. That caught the attention of Congress. Have debtors the ability to choose a state or state creditor waiver when filing for bankruptcy. Over the year Debtors moving to Florida to escape creditors could avail of Florida’s unlimited homestead relief, file for bankruptcy, sell or mortgage the home, and use the proceeds free of creditors. Bankruptcy laws have been changed to limit the exemption to $ 170,350 when the Homestead was un owned for at least 40 months before filing for bankruptcy. The limit is adjusted every 3 years.
Homestead is the primary residence. That has led to some interesting legal proceedings. The difference between an RV and RV is enough that Florida courts generally agree that RVs can be a homestead, but RVs cannot. The courts generally When making a decision in these cases, pay attention to the durability of the ties to the country. The courts have also dealt with b. dealsoats Owners claim their boats are homesteads. The Florida courts have come to differing opinions on the boat issue, but it seems less likely that a boat than on Homestead when it is primarily a recreational boat and is used for transportation as opposed to a boat the is primarily used as a residential building.
The constitution protects home ownership, but only within the prescribed size limits. That has led to legal proceedings attempting to split protection when the the size of the property exceeds the constitutional limit or part of the property is used commercially. If the property exceeds the acreage, courts have ordered that the property be sold and that the proceeds be divided between homestead and non-homestead shares.
Sharing for residential and commercial purposes is more complicated. P.Robertyou use clearly identifiable, courts have ruled the commercial part is not exempt from creditors’ claims. The dishes have tended to be sifrom with the debtor when the propertyYes The use for the business of the debtor is irrelevant for the use as residence, e.g. B. if the debtor runs his business from home or even ifn the debtor sells trees that have grown in the country.
The debtor is not “blocked”–in “to protect a particular property from creditors. Homestead can be sold, and the proceeds are protected as long as the proceeds are used to purchase a replacement homestead in Florida. Florida has followed this rule to the point that returns that have been held for years are protected.
Florida’s courts and bankruptcy courts have generally agreed that homestead proceeds are only exempt from creditor claims if they are held and used to purchase a substitute homestead. The Florida Supreme Court first upheld this concept in 1962. That year the court ruled that the proceeds from the sale of a homestead must be placed in a separate account for the purchase of a replacement homestead and then used toyouy the substitute homestead
In 2016, Florida became S.supreme C.our unauthorized investment of funds from a special account held by homestead in mutual funds and stocks. The court stated that in 2016, Bank accounts did not generate any appreciable growth and it would be inappropriate to put funds in a bank account. That shouldn’t be considered as allowing Debtors to use the proceeds from the sale of homesteads for investment purposes but only to protectS. them if earmarked for acquisition Substitute homestead. The Florida Supreme Court’s 2016 ruling affected an account at Wells Fargo that was clearly intended for the purchase of a substitute homestead, but under which the bank was allowed to invest in stock.
Even if Florida’s constitution has Extensive language to protect homestead property has created exceptions in Florida courts in which the homestead is guilty of wrongdoing. Where funds are used to buy Homesteads were obtained through fraud or other unlawful actsS., the courts have allowed the aggrieved creditor to reach the homestead. Courts have also ruled that homesteads are not protected if used to thwart marriage agreements. However, Florida has not frowned upon investing funds in a homestead as bankruptcy protection when the investment was clearly intentional avoid his creditors. In the absence of a particularly serious act by the debtor, home protection stands strong.
Florida’s homestead shelter is a powerful shield against creditors. The limited exemptions created by the courts do little to reduce protection. C.Often times, the protection of the Constitution comes as an unwelcome surprise to foreign creditors, but it does provide financial security for those faced with unplanned expenses. It’s not just that sharp service invest In on Homestead that is protected. It also protects those faced with unexpected medical bills and similar liabilities. Protecting homesteads is an important part of Florida law.
William G. Morris is the director of William G. Morris, PA. William G. Morris has represented clients in Collier County for over 30 years. His practice includes litigation and divorce, business law, estate planning, clubs and real estate. The information in this column is of a general nature and is not intended as legal advice.