A Basic Overview of Florida’s Homestead Exemption

Estate planners should take full advantage of the unique opportunities their home states have to offer. The good news is that Florida offers many estate planning opportunities not seen in other states. This should hardly come as a surprise, especially with Florida’s high population of senior citizens. One of the most promising opportunities in Florida is the homestead exemption, and this is something many estate planners in Tampa are completely unaware of.

What Is a Homestead Exemption?

 In general terms, a homestead exemption makes your personal residence “exempt” from claims by creditors. In other words, estate planners can live securely without fear of losing the roofs over their heads. With a “full” homestead exemption, creditors cannot force you to sell your home in order to satisfy your debts.

Unfortunately, many states do not offer a full homestead exemption. Instead, the exemption is limited to a certain amount. For example, an elderly couple may only get to “keep” $100,000 of their home’s value according to their state’s homestead exemption. In addition, these exemptions often reduce or eliminate property tax obligations.

The exemptions can be incredibly useful for seniors and estate planners, especially those who struggle to pay the bills during their twilight years. These seniors may face serious medical bills, and may find it difficult to pay property taxes due to rising inflation and lower income.

How Does Florida’s Homestead Exemption Work? 

Florida’s homestead exemption is unique, as it provides total and complete protection from most creditors. This is why many seniors with significant debt choose to purchase homes in Florida and retire in the Sunshine State. By shifting assets into Florida real estate, these debts become impossible for creditors to recover. You can even sell your home in Florida and immediately purchase a new one without your creditors intercepting the funds.

You should also know that the homestead is generally considered an exempt asset in terms of Medicaid eligibility. Normally, high-net-worth spouses do not qualify for Medicaid with significant assets. If this asset is the spouse’s primary residence, however, it may be exempt. While this exemption has limits, you can subtract your outstanding debts from the value of your home to lower the amount. Finally, Florida’s homestead exemption allows you to reduce your home’s value by $50,000 for property tax calculations. Thanks to a new bill, this amount could increase in coming years on par with inflation.

Note that Florida’s homestead exemption does not protect against all creditors. Debts to the government (including the IRS) may still trigger a forced sale. You might also be forced to pay debts for unpaid renovations to the home in question. Finally, Florida’s homestead exemption does not override mortgage debt.

Find an Experienced Estate Planning Attorney in Tampa 

If you’ve been searching for an estate planning attorney in Tampa who can help you take advantage of the homestead exemption, look no further than Knudsen Law. Over the years, we have helped numerous estate planners with things like asset protection, trusts, powers of attorney, probate, and much more. Reach out today to learn more about whether the homestead exemption could benefit your family.

Sources: 

floridarevenue.com/property/Pages/Taxpayers_Exemptions.aspx

nbcmiami.com/news/local/florida-homestead-exemption-bill-lower-property-taxes-what-to-know/3344933