As important as homestead protection is for residents in the state of Florida, it is not uncommon for people to have little knowledge about how the law works to protect them. This protection actually provides Floridians with security in three important legal areas, all based on the state’s Constitution. Florida residents should understand the basic protections afforded to them under the law so that their estate planning can be designed in a way that maximizes the benefits to which they are entitled. Yes, Florida homestead law can protect your interests in many ways, but you may need legal assistance to ensure that you take advantage of those protections.
Transfer or Devise Homestead Protection
Under Article X of the state’s Constitution, certain restrictions apply to the transfer or devise of any property that qualifies as a homestead. Married couples are only allowed to transfer their homestead property when both of them sign the mortgage or deed, and when one or both of them die then there are limits as to how the property can be left to surviving loved ones. Certain surviving family members receive priority under this system.
If you die before your spouse, then the only valid transfer allowed under the state’s homestead laws would be to your surviving spouse. If you were survived by your spouse and one or more minor children, then there is no transfer permitted. Instead, that spouse can either accept full ownership of the property for life or share ownership with the children. If you die and have minor children but no spouse, the children receive the property as tenants in common. If the children are adults when you die, then the property can be legally left to any of them.
Forced Sale Homestead Protection
This is the protection that most people in Florida think about when they hear the words “homestead protection.” It too is found in Article X, and protects your homestead property from being forcibly sold by your creditors regardless of the home’s value. The only exceptions to this protection occur when the debts involve taxes or assessments, debts resulting from property improvements, and any outstanding mortgage obligations. There are certain requirements that must be met before this protection applies, however.
You must, for example, qualify as a natural person who is an established resident of the state of Florida, and demonstrate that you either lived in the home or had the intent to do so. Your property must also satisfy certain requirements with respect to its size and contiguous nature. As you might expect, you also have to be able to demonstrate that you are the actual owner of the property.
Property Tax Homestead Protection
Under Article VII of the state Constitution, your homestead is also entitled to certain protections from a portion of property taxes. This protection provides for an exemption of $25,000 of a home’s value when property taxes are being calculated, with an additional $25,000 for homes valued at $75,000 or less – except for taxes that are designated for schools. Residents can even transfer this protection from one home to another as long as certain requirements are met.
Seniors are also entitled to an exemption in certain counties and cities that can amount to $50,000. There are also exemptions available for veterans, widows, the blind or disabled, and soldiers deployed anywhere in the world.
Securing these Protections
While these protections can be extremely important in your estate planning, they don’t just happen of their own accord. Residents who want to enjoy homestead protection from taxes, for example, must submit homestead application for processing and approval. That application has to be submitted no later than the First of March after permanent residency has been established.
To enjoy protection from forced creditor sale of your homestead, you have only to prove that you meet any of the specific requirements laid out in Florida’s legislative statutes. These requirements are fairly basic and include things like possessing a Florida driver’s license, being registered to vote in the state, having registered vehicles in Florida and the appropriate tags, and having the homestead address listed in your children’s school records, on your bank accounts, or with an employer. You can also choose to file a formal Declaration of Domicile at the county recorder’s office, but that is optional.
The transfer or devise protections require no action on your part, since they are simply a matter of law. It is still important to understand how those protections can work to your benefit when combined with other protections, as well as how they can limit your estate planning options when it comes to transferring the homestead after you die. The protection itself does ensure that your homestead will transfer to your spouse when you pass away, and cannot be forcibly sold by creditors to satisfy debts. It can, however, make it difficult to implement transfers if your estate plan has not been properly prepared.
Secure the Help You Need
Some residents might assume that they can get around some of the restrictions on transfers through the judicious use of trusts or other estate planning strategies. Others sometimes assume that tax protections protect them from other creditors. Obviously, all of these protections have a complex and intricate relationship with one another, and how they impact your own situation will depend on a variety of factors. To fully understand the ramifications of each protection, and how they should affect your estate planning strategies, you should secure the advice of competent estate planning experts.
At Robert J. Kulas, P.A., we have the expertise and experience you need to ensure that you receive the guidance and assistance you deserve. We will work with you to build your estate plan in a way that both accommodates and benefits from these important constitutional homestead protections. Contact us online or give us a call at (772) 398-0720 today to learn more about how Florida homestead law can protect your interests and how those protections could impact your estate planning needs.
