As
we have discussed in previous Wealth Preservationist posts, Florida is a state
that provides significant asset protection mechanisms as a matter of state law.
This post will briefly discuss perhaps the most significant of all Florida
asset protection measures, the Homestead protection, as provided in Article X
Section 4 of the Florida Constitution.
Florida’s
Homestead Protection provides that your “homestead” property is exempt from
levy and execution by judgment creditors. Simply stated, a creditor (other than
the 3 types of creditors listed below) cannot force the sale of your homestead
to satisfy a judgment.

Although
this seems like a very strong protection, there are three scenarios in
which the Homestead Protection will not prevail: IRS tax liens, mechanic’s
liens associated with maintenance or construction of the specific homestead
property, and liens related to mortgages and Home Owners Association dues. These
classes of creditors can attack your Homestead property and force a sale to
satisfy a judgement.
In
addition to the protections that Homestead provides for a homeowner, it also
protects the homeowner’s surviving spouse and minor children in the event of
the homeowner’s death. Specifically, if a homeowner is survived by a minor
child, he or she cannot transfer the homestead property to anyone other than their
spouse or for the benefit of the minor child. If the homeowner is survived by a
spouse but no minor children, the homestead property can only be devised to the
surviving spouse.
Florida’s
Homestead Protection is an extremely valuable measure that should not be
overlooked. This is why many people who are looking to avoid creditors will
move to Florida, buy an expensive home and use the Homestead statutory
protections as a means of sheltering assets against their creditors. Moreover,
this is essentially a free measure for many people to protect what is likely
their most valuable asset, their home. If you are a permanent resident of
Florida it is wise to ensure that you are protected.
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