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…