Q. What is “homestead” under Florida law?
A. The homestead laws provide special protection from creditor claims, it provides a cap on increases of the property’s taxable value each year for ad valorem taxes, and provides protection of a transfer away from the owner’s surviving spouse and children.
Q. Where does it come from?
A. The Florida Constitution and the Florida Probate Code.
Q. What does it protect?
A. A home if located outside a municipality up to 160 acres of contiguous land and improvements, or if located within a municipality up to ó acre of contiguous land and improvements.
Q. How is the homestead protected from creditors?
A. The homestead is exempt from a forced sale by any court, and no judgment or lien shall be placed on the home except for payment of property taxes and assessments, mortgage or improvements made to the property.
Q. Who has the benefit of the creditor protection?
A. The owner. Additionally, the owner’s creditor protection is passed on to the surviving spouse and heirs, not just the owner’s children.
Q. What does it prohibit?
A. Article X of the Florida Constitution prohibits certain transfers of the homestead. The homestead shall not be devised if the owner is survived by a spouse or minor child, except that the homestead may be devised to the spouse if there is no minor child.
Q. What are the consequences if the transfer was prohibited under the law?
A. If the transfer is prohibited, the Florida probate code provides how the property will descend. If there is a prohibited transfer, the homestead shall descend in the same manner as intestate property; but if the decedent is survived by a spouse and one or more descendants, the surviving spouse shall take a life estate in the homestead with a vested remainder to the descendants in being at the time of the decedent’s death per stirpes.
Therefore, this prohibited transfer could cause significant unintended consequences and the homestead could pass contrary to the owner’s wishes.
Q. If the homestead is owned in an individual’s revocable grantor trust, may it still be claimed as the homestead for creditor protection?
A. Yes.
Q. If the homestead is owned in the name of a corporation or limited partnership, may it still be claimed as the homestead for creditor protection?
A. No.