Protecting Homestead Property from Creditors

homestead creditors

The State of Florida provides Florida residents with homestead protection and homestead tax exemptions. Specifically, Article X, Section 4, of the Florida Constitution provides protection against certain creditors of the owners of the homestead property. These creditors may not force the sale of the homestead property. In some situations, your homestead property may not be protected and you could be forced to sell because of a condominium or homeowner association lien, taxes and assessments, mortgage lien, or a mechanic’s lien for contracted work that that occurred on the property

Here are some of the ways to protect your homestead from creditors:

  • When the decedent is survived by spouse and minor children, the homestead goes to the minor children, then the spouse and the vested remainder to the lineal descendants of the decedent. The homestead will not be subject to probate and will not be subject to the claims of creditors of the decedent's estate. 
  • When the decedent is survived by spouse and adult children, the homestead goes to the spouse with vested remainder to the lineal descendants of the decedent. In either case, the homestead will not be subject to probate and will not be subject to the claims of creditors of the decedent's estate. 
  • When the decedent is survived by spouse only (no lineal descendants), the homestead goes to the spouse and the homestead will not be subject to probate and will not be subject to the claims of creditors of the decedent's estate. 
  • When the decedent is survived by lineal descendants only, and the homestead is devised to heirs listed in “Share of other heirs”, the homestead will not be subject to the claims of creditors of the decedent's estate. 
  • When the decedent is not survived by a spouse or lineal descendants, the decedent can devise the homestead any way they wish as long as the homestead is devised to heirs listed in “Share of other heirs”, the homestead will not be subject to the claims of creditors of the decedent's estate.
  • DO NOT direct that your homestead be sold and the proceeds be placed in the residue for distribution as it will lose its homestead character and WILL NOT be protected from the claims of creditors. See Knadle v. Estate of Knadle, 686 So.2d 631.

In addition to above, and in simple terms, in order to have protection of your homestead property you must be a Florida resident, you must live in the primary residence, the title must be in your name – not a partnership or corporation, and your homestead must be established before any levy of a creditor. There must be no allegations of fraud or egregious conduct and there should be no questionable sources of funds used when acquiring the homestead. Also, if you decide to sell your primary residence property you can extend the homestead protection only if you choose to use those proceeds to reinvest into another property as your primary residence.