Author: Jim Joiner

Homestead II

So, now you know how your homestead is protected.  You need to know specifically how you can get into trouble if you put someone else’s name on your homestead.  First, the traditional way to transfer property to children or other family members is to deed the property to them and keep a “Life Estate”.  That means you own the right to live on the property for the rest of your life, and at your death, the “Remainderman” – the person you deeded the property to – gets title to the property upon the recording of your death certificate without a cause of death.  With this type of transfer, you still get to keep the homestead exemption for real property taxes.  Simple enough right?  Well, if your “Remainderman” does not live on the property as their homestead, and owes money to people, or has creditors that come into the picture after they get their ownership interest in the property, that creditor or person they owe money to can take their interest in your homestead.  They cannot make you leave your homestead and you get to keep it until you die or abandon it (like moving permanently into assisted living or a nursing home).  You also have the responsibility to keep the real property taxes paid, to keep the property insured and to keep it maintained.  That means if the “new” remainderman thinks you need to replace the roof or maintain the paint job better than you are doing, they can make demands and possibly even sue you to make you do what they want about the condition of the home.  If you want to make changes to the home, the “new” remainderman believes will devalue the home, they can take some action (sue you) to make you stop what you are doing and put the property back the way it was.  There are all sorts of creative ways they can cause you problems.  Maybe they think you should have better insurance on the property to cover their interest when the property is damaged or destroyed.  They can make you spend more money on insurance than you want and make you keep more insurance coverage on the property than you otherwise would.  With society willing to sue at the drop of a hat, there are more ways than I can think of for them to give you problems.

To be continued…

HOMESTEAD

Most people do not realize there are two protections for their homestead in Florida.  The one everyone knows is the Homestead Exemption tax protection.  The second, and in many ways the most important, is the protection against levy for debt.  Creditors cannot take your homestead for debt.  People or companies you owe for credit card debt, medical and hospital bills, nursing home bills, Medicaid, etc. cannot make you sell your home to pay their debt.  There are only 5 ways you can lose your homestead for debt: 1) you sign a mortgage to make your home subject to a debt; 2) you do not pay your real property taxes; 3) you do not pay your Federal income taxes; 4) you fail to pay homeowner’s association dues, where the homeowner’s association has the ability to file a lien against your homestead; and 5) you have work done to your home for which a mechanic’s lien can be filed (home improvements, air conditioning replacement or repair, new roof, add a pool or a room to the home, remodel the kitchen, etc.) and you fail to pay the contractor or repairman.  The homestead protection against levy for debt carries over to your estate if you leave your homestead to relatives.  Your family beneficiaries would take your homestead free and clear of debts except those 5 listed above.  This benefit is for people who own the property and live on it as their primary residence.  It does not apply to any person who has an ownership interest in the property who does not live on the property.  If you deed your homestead to your children, even if you keep a life estate interest for yourself, their interest in the property is not protected from their creditors, which can cause a lot of problems.

To be continued…