A client reports that he lives in a motor home. Most of the time he parks the motor home in a rented space in Florida, and for all other reasons, he maintains Florida as his residence. He neither owns nor rents any real property in Florida or anywhere else. He asked me whether the motor home qualifies as his homestead because it is the place where he resides with his spouse.
Continue Reading...I would appreciate anyone's thoughts on the following questions posed by a bankruptcy attorney in Kentucky. The attorney represented prospective bankruptcy debtors who moved to Kentucky from Florida within the past two years. Under the new bankruptcy law, they are ineligible to use Kentucky exemptions because they had not resided in that state for two years. The last state where they lived for two years was Florida. The attorney concluded that Florida exemptions would apply to his Kentucky case, except for one issue. He asked me whether a person has to be a resident of Florida to be eligible for Florida's exemption under a Florida statute or the Florida constitution. If so, his clients, now Kentucky residents, could not use Florida exemptions and would file bankruptcy under federal default exemptions.
Continue Reading...A email asked whether proceeds from the re-finance of homestead owned by husband and wife are protected from creditors under Florida law.. It depends what the owners do with the money. Assuming the homestead is owned jointly and net refinance monies is deposited in a joint checking account, then the money would be protected as tenants by entireties money from the creditors of either spouse individually, If the money was put in a financial account titled in the name of just one spouse and that spouse had judgment creditors, or if it were deposited a joint account and both spouses and both spouses had judgment creditors, the money would not be protected from creditors even if it came from the refinance of a homestead.
Continue Reading...I occasionally get email questions about offshore trusts for people interested in sheltering income taxes. My reply always is that asset protection planning is income tax neutral, and that an asset protection plan is not designed to reduce taxes. Nevertheless, there are promoters and attorneys who market various plans to reduce income tax involving one or more offshore legal entity. There is a well know website called Quatloos.com which reports on tax evasion scams and the prosecution of their promoters. In a November 1, 2006, post Quatloos includes a report on offshore tax havens written by the U.S. Senate committee investigating income tax scams.
Continue Reading...No matter how much I think I know about asset protection there is always some new risk of liability that surprises me. A client called me about his car insurance. The client had a child in college in another state. The child had a drivers license in the other state and not in Florida. The same child owned a car in the child's own name. The child had his own car insurance with minimum liability coverage as the parent/client believed liability coverage was not important for a child with no assets. The client's insurance agent said that his own $1m umbrella policy would not cover him unless the child raised his insurance liability limits or the child were insured under the parent's own policy with high liability limits. This seemed illogical because the child was an adult and his ownership and operation of the car was in a totally different part of the country.
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