Using Florida’s Homestead Exemption as an Estate Planning Strategy

Estate planning and real estate often go hand in hand. Many Florida seniors own their own homes, and this is often their most lucrative asset. Like many states, Florida gives homeowners something called a “homestead exemption.” When handled correctly, this could form the basis of an effective estate planning strategy. It may even encourage people from out of state to relocate – and retire – in Florida. As with all complex strategies, it is best to explore this option alongside an experienced estate planning lawyer in Palm Beach and Martin County.

More Seniors Are Navigating Retirement With Considerable Debt

 According to the American Association for Retired Persons, seniors carry more debt than ever before. Even though it might have seemed unthinkable a few decades ago, millions of senior Americans still have student loans. Inflation has completely demolished savings and seniors who once relied on their pensions and 401(k)s are realizing that their income cannot keep pace with rising costs. Credit card debt is also an inevitable consequence.

How Does the Florida Homestead Exemption Protect Against Debt? 

Florida’s homestead exemption protects homeowners from most creditors. As long as your primary residence is in Florida, the net value of this property cannot be claimed by creditors. While other states have their own homestead exemptions, Florida’s has effectively no upper limits.

This potentially allows people to transfer their wealth into a Florida residence to protect against creditors. Due to the availability of luxury mansions throughout Palm Beach County and the surrounding areas, seniors (and anyone else) could move millions of dollars into these “brick-and-mortar safes” in order to shelter their wealth during their lifetime and pass that wealth on to children when they die.

For example, a 65-year-old senior may be heavily in debt – perhaps facing student loans and credit card bills. If this individual suddenly inherits millions of dollars, they could potentially relocate to Florida, buy a home and avoid losing the value of that home to creditors. Another example is a personal injury verdict that requires a senior motorist to pay millions to an injured plaintiff.  Even when the motorist is found to be at fault, he or she cannot be required to sell their homestead to satisfy the debt.

The homestead exemption also extends to your beneficiaries after you pass away. You can leave your Florida primary residence to your loved ones without worrying about creditors intercepting it. However, it makes sense to discuss this strategy in more detail with an estate planning lawyer. In order to take advantage of the Florida homestead exemption, you must fully commit to living in the Sunshine State.

Can an Estate Planning Lawyer in North Palm Beach Help With Asset Protection? 

An estate planning lawyer in North Palm Beach or Stuart may be able to assist with various asset protection strategies. Although the homestead exemption in Florida offers unique opportunities, there are many other strategies that could also be appropriate. As with all estate planning decisions, it is best to discuss your family’s unique circumstances with a legal professional beforehand. Contact Kitroser Lewis & Mighdoll today to continue this discussion.

Sources: 

whhlaw.com/oj-simpson-really-moving-florida-debt-collection/#:~:text=Among%20the%20States%2C%20Florida%20has,their%20assets%20are%20judgment%20proof.

floridabar.org/public/consumer/tip006/