There are asset protection features in Florida that are not available in many states. This month we will discuss your homestead. Your home is truly your castle in Florida and your homestead is protected from all third party creditors under Article X, Section 4 of the Florida Constitution which exempts your homestead property from levy and execution by judgment creditors. This protection applies to traditional homes, Condominiums, manufactured homes, mobile homes and even boats if used as the person’s primary residence. The Constitution defines homestead as one’s principal place of residence up to one-half acre within a municipality and up to 160 contiguous acres in any county in Florida. Also, upon the death of the owner, the protection is extended to beneficiaries who are related by blood to the decedent.
In the event of bankruptcy, the asset protection is limited to $125,000 if the property was acquired within the previous 1215 day, but is unlimited if the purchase was made more than 1215 days. Also, to use the bankruptcy homestead exemption, you must have been a resident of Florida for at least 730 days prior to filing for bankruptcy. This is simply one exemption of asset protection available to Florida residents.
Other assets that are protected in Florida include: annuities, all qualified pension plans, social security benefits, life insurance, qualified prepaid college plans, irrevocable trusts, veterans benefits, bank accounts holding only exempt assets, etc.
Also, it should be pointed out that exempt assets can lose their exemption under certain situations such as fraud, income tax evasion, the commission of a felony, and similar acts.