What are the some important aspects of the Florida Homestead Exemption?
To qualify for homestead protection, a person must be a permanent resident of Florida, and the homestead must be that person's primary place of residence, among other rules.
Often misunderstood as it can sometimes be confusing and even counterintuitive, the “legal chameleon” of Florida Homestead Law is an important aspect of Florida Law appearing in many legal situations.
Some of these aspects are explained in brief, below. For guidance regarding your particular concern, be sure to consult with an experienced Florida Homestead Law Attorney.
Ad-Valorem Tax Exemption
Many Florida homeowners are familiar with the Florida Homestead Tax exemption, which is explained by the Florida Department of Revenue as follows:
“When someone owns property and makes it his or her permanent residence or the permanent residence of his or her dependent, the property owner may be eligible to receive a homestead exemption that would decrease the property's taxable value by as much as $50,000. This exemption qualifies the home for the Save Our Homes assessment limitation. While the exemption is nontransferable, a homeowner may be able to transfer or “port” all or part of the assessment difference to a new Florida homestead. “
(Source: https://floridarevenue.com/property/Pages/Taxpayers_Exemptions.aspx, last visited 12/21/2023)
Protection from Forced Sale
The Florida Constitutional homestead exemption offers virtually absolute protection from forced sale to meet the demands of creditors, except under four special circumstances, and should not be confused with the Florida Ad Valorem tax reduction savings, which is governed by the Florida Statutes.
Generally, these exceptions to the protection from forced sale include:
1. Mortgages against the Homestead
2. Unpaid Ad-Valorem Taxes
3. Mechanic's Liens for work on the Homestead
4. Liens Which pre-date the establishment of the Homestead (usually homeowner/condo assoc. liens)
Like many legal matters, the Florida Homestead Law is not always “bright line” clear. In the case Havoco of Am., Ltd. v. Hill, the Florida Supreme Court allowed an equitable lien on homestead in those cases where the owner of the property used the proceeds from fraud or reprehensible conduct to either invest in, purchase, or improve the homestead.
While the nature of the Havoco ruling by the Florida Supreme Court appears very narrowly tailored so as to avoid constituting an additional exception from the Constitutional exemption, it can be of significant importance under certain sets of facts. On behalf of a private client, Attorney Mark James successfully prosecuted this type of fraud/egregious conduct matter in Federal Bankruptcy Court in Florida in 2022, obtaining a six-figure equitable lien against the defendant's homestead, where the purchase of the homestead was traceable to tainted funds.
Surviving Spouse and Children's Homestead Rights in Florida Probate
Florida law restricts the ability to gift your Florida Homestead by will if the decedent is survived by a spouse or minor children. Just like Elective Share and Family Allowance in Florida Probate, Florida Homestead Rights benefit surviving spouses and “Heirs” who would inherit the property as though there was no valid will. This can pose potential family conflicts, especially in “blended family” cases where the heirs of the person who died (“decedent”) are not the heirs of the surviving spouse! Also, a specific gift of homestead by will can completely destroy the Florida homestead property's protection from claims of creditors after you die. This is one of the many reasons why, in my opinion, “do it yourself” and “online wills” can be a false economy, potentially losing extremely valuable protections unique to Florida law. The law of unintended consequences is alive and well in Florida Homestead Law. You worked hard to obtain what you have. You owe it to yourself and your family to consult with an experienced Florida Estate Planning and Probate Attorney when questions or problems arise.
Planning for and dealing with Florida Homestead and Homestead Exemption issues in DeLand, Volusia County, Florida and Lake Mary, Sanford, Seminole County, Florida can be a challenging endeavor. Often, a brief consultation with an experienced Florida Homestead Attorney can help you address your concerns and ensure that the correct steps are taken to protect your Florida Homestead rights and answer your questions, regardless of the legal concern involved. Attorney Mark James is experienced with handling Homestead, Elective Share, Family Allowance, Probate matters both inside and outside the courts of Florida and offers a free initial consultation to discuss your concerns.
