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

Many real estate professionals have large commercial development loans which they are having difficulty repaying in today's real estate environment. One such client and his wife are planning to move to Florida to protect their wealth in the likely event that the bank calls a large commercial loan personally guaranteed by the husband. The non-debtor wife has already moved to Florida and purchased a home with her husband where the wife now resides with her children. She and her children travel up north each weekend to visit her husband The wife has a Florida drivers license and other indices of Florida residency. The debtor husband remains "up north" where he is trying to salvage his company's loans and sell the couples' jointly owned real estate. The couple wanted to know how they can safely finish liquidating their home-state property and protect their money in Florida.

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Just because the law protects an asset or an account from creditor does not mean your creditors will not try to levy on the asset or garnish the account. Consider this example reported by a current client. The client, who is married, borrowed money in his own name from a large bank. The bank called the loan and demanded payment in full. The client ignored the call and continued to make timely monthly payments. The client and his wife had a joint account at the same bank. All money in the account was deposited from his wife's earnings. The wife did not sign the note or any guarantee of the note. Without warning, and without filing a law suit to enforce the note, the bank invaded the account and took all of the wife's money to pay off the loan.

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Generally, if a husband transfers non-exempt property to his wife in the face of a creditor's claim or lawsuit, the transfer will be reversed a a fraudulent conveyance. From time to time people who anticipate a legal problem tell me that in the event they lose a lawsuit they will divorce their wives and give their property to their wife as part of the divorce. The legal issue is whether there can be a fraudulent divorce to avoid or delay creditors. Does the fact that the divorce settlement is approved by a court protect property transfers made pursuant to the settlement agreement?

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I have previously posted on this Blog information about homeowner mortgage benefits in the initial bailout bill that was rejected by the House on September 29, 2008. I have reviewed the final, revised bill signed into law on October 3, 2008. The final bill contains essentially the same mortgage modification provisions. The bill directs the Treasury to encourage mortgage service companies to mitigate foreclosure by adjusting the interest rate, payment terms, as well as the mortgage balance of certain home mortgages. The law is written generally and without details. The Treasury Department likely will issue federal regulations which state whom is entitled to benefits and the procedures to request mortgage modification.

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