Homestead Protection Defeats Creditor Even After This Debtor Moves To A New Address
A Florida debtor can protect his primary residence from creditors so long as either the debtor has an ownership interest in the property and either the debtor or the debtor’s family resides in the property as their principal residence. Even if the debtor moves to a new residence his former residence is still protected from his creditors under the Constitutional homestead provision if a member of his family continues living in the house.
This principal is explained in a recent decision of a Florida appeals court. In this case, a man, his wife, and their child lived in a Florida home. The couple divorced. The divorce settlement required the husband to deed the home to the wife who, together with the child, would live in the home exclusively. The husband moved out but never signed a deed to the wife. A creditor obtained a judgment against the husband only.
The wife died. After her death, the husband deeded the house to their child who was now an adult and still lived in the home. The judgment creditor sought to foreclose its judgment lien on the house. The creditor argued that after the husband/debtor lost his homestead protection when he left the house following the divorce.
The court held that the house retained its homestead exemption against the husband’s creditors. The divorce decree ordering the husband to give the home to his wife did not terminate the husband’s homestead rights because homestead protection is forfeited only by voluntary abandonment or conveyance. The husband did not voluntarily abandon the homestead protection when he moved to a new Florida residence because a member of his family, his daughter, continued to live in the home. When the husband transferred the home to his daughter he no longer had an interest in the home subject to levy.
This court’s decision reflects the important principal that the public policy behind the generous homestead exemption is designed primarily to protect the debtor’s family as opposed to the debtor himself. Beltran v. Kalb, 2011 W.L. 904244.
