In Florida, our home is truly our castle, a castle that is impenetrable by creditors. The Florida Constitution exempts homestead property from levy and execution by judgment creditors. Florida courts have liberally expanded definitions of homestead property which includes more than just a single family house. Condominiums, manufactured homes, and mobile homes are also afforded homestead protection. 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. To qualify for homestead protection, a debtor must be a Florida resident and the homestead property must be his primary place of residence. Property purchased as a future residence is unprotected until the property is occupied as a principal residence. A second home or investment property cannot be considered a Florida homestead. Only "natural persons" qualify for homestead protection so properties titled in the name of irrevocable trusts, corporations, or partnerships will not qualify. Property owned by a living trust can e homestead property. A newly-enacted Florida Statute provides that property owned by a land trust may be homestead property.

What makes Florida's homestead protection such a powerful asset protection tool is its unlimited monetary protection. A Florida resident can invest millions of dollars in large estate homes and farms and protect the full value of these luxury residences under Florida's homestead law. Under a Florida Supreme Court ruling, a person can transfer unprotected, non-exempt assets to his homestead at any time by either buying a new home or reducing the principal balance of an existing mortgage and protect this money under the homestead umbrella, even if the asset transfer was clearly designed to hide money from creditor claims.

Homestead is not protected against tax liens, mortgages, homeowner association assessments, or from mechanics liens associated with labor or materials to repair or improve the homestead property. Also, the asset protection benefits of homestead should not be confused with the homesteaded tax exemption.

Homestead protection may not apply if the debtor files bankruptcy. Under the new bankruptcy law, homestead protection is available in bankruptcy up to $125,000 unless the debtor occupied his current Florida homestead property and previous Florida homestead properties for a continuous 40-month period. Also, transfers of cash into homestead within 10 years intended to defraud creditors.

Questions and Answers about Homestead Exemptions

How to File For a Homestead Exemption

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