Random Homestead Questions
A few homestead questions I received this week which may be of interest to people considering moving to Florida. One reader asked whether the purchase of a house for an imminent move to Florida locks in Florida residency and homestead protection of that property. The answer is no. As I have written many times on this blog, you must actually occupy a house as a primary residence to achieve Florida homestead protection.
Another reader asked whether he had homestead protection of a residence he owned jointly with another family member. The answer is yes. Whatever interest you have in your homestead, legal or equitable, full or partial ownership, is protected from creditors. This reader had legal ownership up to 50% of the house's value, and that ownership interest was under homestead protection.
Last, a reader wanted to know whether he can sell his homestead and reinvest sale proceeds in a protected annuity. This is a more complicated question. Once you sell your Florida homestead the proceeds are protected if you plan to reinvest money in a new Florida home in a reasonable time. If you deposit the proceeds in a non-exempt financial account with no intent to reinvest in a new Florida home, the proceeds are likely not exempt from creditors as soon as they are deposited. If a debtor with foreseeable legal problems deposited homestead proceeds into a non-exempt account, and the same funds were later used to purchase an annuity a creditor would have a strong argument of a fraudulent conveyance. I think the debtor would have a better defense if the annuity were identified prior to the sale closing, and the debtor purchased the annuity directly from closing assigning funds due seller to the insurance company.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
I am recently married, and I own my own home as well as my husband owns his own home, both homestead. My mother and young brother have lived with me, as both are somewhat finaincially dependentant on me and will continue to live in my home as I have moved in with my husband. I stay with my husband and my mother equally during the week. Is there any exemption that I may keep my homestead on my own home too?