This week the Florida legislature voted to eliminate the common law doctrine of joint and several liability. The Governor promised to sign the bill. Under the current law, joint and several liability applies in modified form to economic damages but it had been previously dispensed with for noneconomic damages in favor of a comparative fault approach. The new law eliminates joint and several liability completely.
Continue Reading...The Beal Bank decision by the Florida Supreme Court in 2001 established a presumption that all bank accounts owned jointly by a husband and wife were presumed to be owned as tenants by entireties and protected from the judgment creditors of either spouse, individually. No protection afforded against joint creditors. Since Beal Bank different courts in different jurisdictions have addressed whether the presumption afforded bank accounts in the Beal Bank case extends to other forms of personal property. While these court decisions are not uniform, most courts have held that all jointly owned personal property is presumed to be held as tenants by entireties.
I have written previously about whether a residence owned by a debtor's living trust is entitled to protection against creditors afforded by the Florida Constitution. The Constitution protects homesteads owned by "natural persons." Some creditors have argued that a homestead occupied by the debtor but legally titled in the name of the debtor's testamentary living trust is not protected because it is owned by an entity (the trust) other than a natural person. Several years ago a bankruptcy court denied homestead protection to a debtor's property titled in a living trust. However, a subsequent Florida appellate case from the Third District Court of Appeals reached the contrary conclusion an upheld homestead status to a property held in a living trust.
Continue Reading...Equity stripping involves encumbering equity in an asset such as real estate or receivables in order to secure a loan. In some instances equity stripping may not be available because, for instance, the assets sought to be protected are not acceptable to lending institutions as collateral or the debtor's credit does not warrant a loan regardless of the nature of collateral offered. Another problem with standard equity pledging is that the loan proceeds received become a pot of non-exempt cash in the debtor's hands. One of my existing clients presented an interesting variation of equity stripping protection that could work in some otherwise difficult situations.
A Florida resident can temporarily move out of his Florida residence and still claim the residence as his homestead as long as he demonstrates the intent to return to the property as his permanent home. What happens if a Florida resident has to leave his house to serve prison time for a criminal offense ? Someone inquired whether they could maintain homestead protection if after moving to Florida they were sentenced to prison in another state for a term of about six months. The question is whether forced incarceration out of the homestead constitutes the abandonment of the homestead property.
Continue Reading...The Florida Supreme Court has ruled that debtors can purchase a homestead in Florida to avoid creditors' judgments and the creditor cannot undo the home purchase under Florida's fraudulent conveyance statute. This well-known exception to fraudulent conveyance liability has exceptions. The Court stated that if a judgment arises from acts of fraud or other egregious circumstances then the creditor can have placed an equitable lien on the homestead for the amount of money fraudulently converted into the debtor's home. The equitable lien cannot force the debtor to sell his homestead, but if an when he does sell, the creditor gets paid the amount of his judgment lien.
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