Florida Homestead

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.

Your homestead is defined as your primary place of residence (assuming you are a permanent resident of Florida). Furthermore, homestead is limited to up to one-half acre within a municipality and up to 160 contiguous acres outside a municipality. If you have more than 1 home in Florida, you can only declare 1 of the properties as your Homestead property.

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.