Florida’s Unique Homestead Property Concept

Florida is one of only about seven states that have homestead property. The public policy of Florida is that you and your family should have certain protections, in order to keep a roof over your heads and in securing the home beyond the reach of financial misfortune.

First, let’s define what qualifies as a homestead. A homestead in Florida can include up to 160 acres outside a municipality or a half acre inside a municipality that is owned by a natural person who is a Florida resident. (A natural person is a real human being, as opposed to a legal person, which may be a private or public organization.)

There are at least three parts to Florida’s Homestead Law. First, the aspect that most people know about is the tax aspect, where we all register our property as homestead property with the local Tax Assessor’s Office and receive a reduced tax rate on that property. However, most people do not know about the other two aspects.

The second aspect is protection against Liens (a right to keep property belonging to another person until a debt is paid). No Lien or Judgment can attach to Florida Homestead Property, other than the mortgage on the property, a Federal Tax Lien, and certain Liens imposed by the State of Florida. Thus, if you are forced into Bankruptcy for some reason, you should come out of Bankruptcy with your home intact and free of Judgments and Liens. Also, if someone is just trying to collect a large Judgment against you personally, they cannot attach your Florida Homestead Property.

The third aspect is a restriction on alienation and devise. If you are married, and let’s say that the wife has brought the marital home into the marriage and keeps it titled in just her name alone, if she should die, her spouse has a Life Estate in that homestead property. Her children, by another relationship, for instance, cannot inherit that property until the spouse’s Life Estate is extinguished by his death or by his abandoning or giving up the homestead property. This third aspect is important to consider in Estate planning in blended families.

Lastly, one important thing to remember about Florida Homestead Property is that to receive the above-indicated Lien protection, the home must be left to immediate family and/or blood relatives. If it is left to a friend, for instance, who is not blood-related, that bequest will not receive Lien protection.

Should you sell your elderly parents’ homestead property to raise money to pay for a nursing home? Absolutely not! If Medicaid pays for their stay in the nursing home, there will be a Medicaid Lien filed against the estate when the elderly person passes away. That Lien cannot be collected against the elderly person’s Florida Homestead Property. That property can pass down free and clear of Liens to the elderly person’s blood relatives. If the house is sold and turned into cash before the elderly person’s death, to pay for the nursing home, Medicaid can levy their Lien against that cash. You never want to put in a Will that your homestead property be sold, for instance, and the net sales proceeds be divided among beneficiaries, especially if you are subject to Judgments and Liens or may go into a nursing home.

 

Source:  Thomas C. Staples, Attorney at Law and Fortenberry Legal

 

Greater Pensacola, FL Real Estate Experts – Making It Happen for Buyers and Sellers!

Grand Realty is a greater Pensacola real estate company that opened its doors in June of 2003. We strive to help all of our clients with their individual real estate needs, whether it’s buying a home in Pensacola FL and the surrounding area or selling their existing Pensacola property.

We have approximately 30 agents with a wide range of specialties that include:

  • Pensacola new home buyers
  • Pensacola short sales
  • Pensacola Foreclosures
  • Pensacola Investment properties
  • Pensacola commercial properties
  • Pensacola vacant land
  • Pensacola water front properties

Grand Realty is also proud to say we have agents who are bilingual, Spanish and Chinese that are placed throughout a good majority of Northwest Florida including Pensacola, Milton, Pace, Navarre, Perdido Key, Jay, Cantonment, Gulf Breeze, and Navarre. The Broker of Grand Realty is also licensed in Alabama. Please feel free to email or give us a call, and from everyone at Grand Realty, thanks for your business!

Grand Realty 3806 Hwy 90, Pace, FL 32571 Office Phone: 850-512-1185 Office Fax: 850-512-1195 Email: Office@GrandRealty.net

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