Homestead Protection Of Property Owned In Name of A Partnership
A Florida bankruptcy court recently considered an interesting homestead issue. A debtor resided in a home titled in the name of a limited partnership. The limited partnership is owned primarily by a corporation which is 100% owned by the same debtor and occupant of the property. The debtor argued that although she does not hold legal title to the house in her name, she has an equitable interest in the property as its indirect owner, and that her equitable right to control the property is sufficient to protect the property under Florida's homestead laws. The bankruptcy court ruled against the debtor and found that the property is not the debtor's homestead because it is not owned by a natural person.
The same court noted that in some instances a debtor's indirect equitable interest is sufficient to qualify a homestead property. He referred to a prior court decision holding that a trustee of a spendthrift trust for the beneficiary of the property's resident could claim homestead on behalf of the trust beneficiary. (Case No. 01-bk-9988)
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
I think you you're spot on with this but not in every instance.