This is the second of three (actually four) posts regarding the different “types” of Homestead in Florida. In my previous post on the subject, I discussed “descent and “distribution,” in which the state sets forth the rules governing the situations in which your Homestead may, and may not be disposed of upon your death.
Today, and in a future post, I will be writing about an incredibly important, and complicated aspect to Homestead protection, which is the protection of your Homestead (subject to certain limitations discussed below) from the claims of creditors. This rule has made Florida a haven for people who owe others large sums of money (it’s not just the Golf that brought O.J. Simpson to Miami).
The reason it is so complicated, is that determining whether your Homestead is protected depends on a mixture of state and federal law.
As in the previous post, I would like to start with the Florida Constitution. I have highlighted the important provisions.
Article X, Section 4 of the Florida Constitution provides:
(a) There shall be exempt from forced sale under process of any court, and no judgment, decree or execution shall be a lien thereon, except for the payment of taxes and assessments thereon, obligations contracted for the purchase, improvement or repair thereof, or obligations contracted for house, field or other labor performed on the realty, the following property owned by a natural person:
(1) a homestead, if located outside a municipality, to the extent of one hundred sixty acres of contiguous land and improvements thereon, which shall not be reduced without the owner’s consent by reason of subsequent inclusion in a municipality; or if located within a municipality, to the extent of one-half acre of contiguous land, upon which the exemption shall be limited to the residence of the owner or the owner’s family; (b) These exemptions shall inure to the surviving spouse or heirs of the owner.
In general terms, your Homestead is protected from your creditors. That means if you are sued and there is a judgment against you, you can’t lose your house.
However, there is a twist that I will discuss in part II(b), and this is the Federal law of Bankruptcy can trump the state Homestead law.