How Does Florida’s Homestead Exemption Impact Estate Planning

In Florida, individuals and families may be entitled to a ‘homestead exemption’ that will reduce the total cost of their property taxes and protect them from certain creditor claims. As explained by the Florida Department of Revenue, a portion of the value of your primary residence is automatically exempt from state property taxes.

While they provide strong legal protections, Florida’s homestead exemption is also among the most complex and confusing homestead laws in the entire country. In some cases, people run into trouble after failing to prepare for the implications of the law. In other cases, people leave money on the table. Here, our Tampa asset protection lawyers explain how Florida’s homestead exemption affects estate planning.

A Primary Residence Can Often Be Passed Down to Heirs Outside of Probate 

Not only does Florida’s homestead law provide relief against property taxes, but it also provides property owners with protection against many types of creditor claims. Perhaps most importantly, a legal resident of the state of Florida has the ability to pass down their primary residence—often referred to as the ‘homestead property’—directly to their immediate heirs. This means that it can be passed down outside of the standard probate process.

The net effect of this is that most creditors are not able to go after a person’s primary residence in the same way they are able to go after other assets/property. Though, there is an exception for claims from the Internal Revenue Service (IRS). If a federal tax debt is owed, the IRS may be able to force the sale of a Florida homestead property.

Warning: Homestead Laws Can Potentially Frustrate an Estate Plan 

When planning for what will happen to your primary residence, it is imperative that you carefully consider the impact of Florida’s homestead laws. In some cases, these laws will actually override an estate plan put into place by Florida residents. Specifically, Florida’s state laws restrict what can be done with a homestead property if the decedent is survived either by a spouse or by minor children. To be clear, the potential complications created by Florida’s homestead laws can be dealt with during the estate planning process. You always have options available.

If you have a spouse or minor children, you should discuss how to precisely title your primary residence with your estate planning lawyer. Homestead laws can be complicated: An experienced Tampa, FL estate planning attorney will be able to review your unique circumstances, helping you take full advantage of your legal rights under Florida law and helping you avoid the potential problems that the homestead regulations can sometimes create.

Consult With Our Florida Asset Protection Attorneys Today

At Bubley & Bubley, P.A., our Tampa asset protection lawyers have extensive experience representing individuals and families in Florida. To schedule a confidential asset protection consultation, please contact us today. From our office location in Tampa, we serve clients throughout the region, including in Odessa, Oldsmar, Safety Harbor, Holiday, Trilby, and Crystal Beach.

Resource:

floridarevenue.com/property/pages/Taxpayers_Exemptions.aspx

https://www.bubleylaw.com/triggering-events-for-reevaluating-your-estate-plan/