Proceeds Received From Exempt Assets
I received an inquiry from an out-of-state business person who wants to establish Florida residency to protect himself from anticipated litigation. The question is whether proceeds received from payout by annuities, death benefits of life insurance, or sale of a homestead remain protected after being deposited in his bank account. The answer is different depending on the exempt asset and the language of the Florida statute that exempts the particular asset. Annuity proceeds are expressly exempt under the language of F.S. Proceeds from the sale of a homestead remain protected in the owner's bank accounts if they are traceable and if the owner can show the proceeds are reasonably earmarked for the purchase of a replacement homestead pursuant to court decisions. There is no protection afforded by statutes or by court decisions to proceeds received by a life insurance beneficiary. Death benefits may be attacked by the creditors of the insurance beneficiary after they are paid by the insurance company.
