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Understanding Florida’s Homestead Rules

How to navigate the state’s homestead protection laws to benefit your family.

Understanding Florida’s Homestead Rules

As a homeowner, you have heard the terms “homestead protection” or “homestead exemption,” but do you know how they affects you and your family? Florida is one of several states that offer homestead protection. The rules governing homestead protection or exemption apply in three contexts: exemption from real estate taxes, creditor protection and transfer at death.

Real Estate Tax Exemption
Your primary residence is entitled to receive certain exemptions from real estate taxes. The Florida Department of Revenue’s website has a full list of exemptions including, among others, a cap on assessments called Save Our Homes and exemptions for widows, veterans and the blind. These exemptions give you significant savings on your real estate taxes.

Creditor Protection
Florida prohibits creditor judgments from attaching to your homestead, keeping the creditor from forcing you to sell your home to pay off a judgment. This protection can carry on to certain family members who inherit your homestead after you die. However, there are certain creditor claims that can still attach to your homestead such as IRS liens, foreclosures, past due homeowner association fees and contractors’ liens.

Transfer at Death
The laws governing transfers of homestead at the owner’s death can be extremely confusing because of Florida’s restrictions on who can or cannot inherit your Florida homestead upon your death. This will depend on whether or not you were married at the time of your death and whether or not your heirs are minor children.

•If you have no spouse and no minor children, then you can leave the homestead to whomever you want.
•If you have a minor child and are married with your homestead titled in joint names with your spouse, then your protected homestead goes to your spouse by right of survivorship. However, if the property is in your name only, your spouse has two options: take a life estate (right to live in the property for his or her remaining lifetime) with the home passing to your children at his or her death, or take a half ownership interest and the children will receive the other half.
•Specific rules govern the transfer of your home if you have a spouse and adult children, but rules may differ depending on whether or not your spouse was also the parent of those children.
•If you own the home alone, your spouse can waive all of his or her rights to the protected homestead in a prenuptial or postnuptial agreement and you can leave the property to whomever you wish. This option is subject to the rules for minor children.

Florida homestead laws are complicated and can be difficult to understand. These laws benefit you during your lifetime, but the transfer of your property at your death can affect your survivors and lead to disappointment, division, envy, hatred and greed. To ensure that you understand all aspects of the Florida homestead laws, consider consulting an experienced estate planning and probate attorney to help you plan appropriately and avoid family setbacks, hardships and discontent after you have passed.

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