Florida Asset Protection : Asset Protection Law & Planning in Florida - Florida Homestead Exemption

People facing possible judgments that jeopardize their wealth are often in desperate situations; desperate people sometimes do desperate things to protect themselves. When people consult attorneys about asset protection they sometimes find that they do not have available the best legal documents to substantiate exempt ownership or to protect their business LLC or corporations. Later, the client reports that the correct documents have "been found" in their business or personal papers. Sometimes existing documents are actually found, but sometimes non-existing documents are manufactured and back-dated. I heard of a case this week where a "found" document lead to severe adverse consequences in litigation.

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If you choose to stop paying your mortgage payments the lender will sue for foreclosure and sooner or later, one way or another, the delinquent homeowner will most likely lose the lawsuit and the lender will sell the house at foreclosure sale. I am often asked whether the homeowner should simply "let the house go" or "just turn in the keys", or whether they should retain an attorney to defend the foreclosure even though the chance of winning is small. I now think in most cases the homeowner should defend the foreclosure suit. I don't litigate foreclosure cases. I refer clients to other attorneys who practice in real estate or commercial litigation. More and more, people who hire attorneys to defend foreclosures obtain positive results. Here is one example reported to me by the litigation attorney this week.

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A reader emailed invited me to post his emailed question on the blog:

"My homestead is located in a municipality and is greater than ½ acre (about .82 acres). I purchased the house before I was married (in 2002). Recently, after we had been married about 1 year and 5 months, we filed a quit claim deed so that my wife is now a joint owner of the house. From what I understand Florida law automatically considers this tenancy by the entireties ownership. If I was to receive a judgment against me, is my homestead protected from a forced sale (and distribution to the creditors of 39% of the proceeds) since it is also my wife's homestead and she is a joint owner? In this situation, am I subject to any look back periods as far as when the ownership was changed? The reason it was changed so far after the wedding is that my wife lived separately from me to complete a residency program. The quit claim deed was filed the month that she moved in with me and the house became her primary residence"

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The owner of a Florida homestead takes a one-year work assignment in another state. He rents a house in the other state for work. He decides to rent his Florida homestead as much as possible to help carry the mortgage. The house is in a vacation area, and the best rental opportunities are weekly rentals to people on vacation. Vacation rental are primarily during the summer months. The house will not be rented during most of the winter. The person hopes to return to the Florida house after his year assignment, but his return is not guaranteed by his employer. He asks whether he will retain homestead protection during his absence under these facts.

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A client's real estate development company obtained a large construction loan from a commercial bank. The client personally guaranteed the loan. The company will soon be unable to pay the loan so that the loan and guarantee will be in default. The guarantee document contained a clause which stated that the borrower waived Florida homestead protection to the extent allowed by law. The client use to transfer non-exempt money to pay down the homestead mortgage in order to protect the money from a future judgment in the event the lender sues on the guarantee. The client asks whether the homestead waiver forfeits his homestead protection including cash paid toward the mortgage soon prior to a lender lawsuit.

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