Homesteading Your Home

Sat, Jun 25, 2011

Bankruptcy

Homestead Sarasota LawyerFlorida is famous for its liberal laws regarding homestead protection. Here’s a brief discussion of what “homestead” means in Florida, and how it affects you. If you have a dilemma regarding your homestead status, please consult an experienced Sarasota Lawyer for expert advice.

Florida’s homestead protections cover three areas:

Tax Exemptions

Every homeowner knows the pain of property taxes, and none more than Florida homeowners. When you purchase a home in Florida, don’t forget to file the appropriate paperwork to obtain your homestead exemption, which will reduce your home’s assessed value by $50,000 for tax purposes. Neglecting this opportunity will lead to either a higher house payment (if your taxes are included) or a nasty surprise every year when taxes come due. Your homestead tax exemption is available only on your primary residence, and cannot be transferred. If you move, you’ll pay tax based on a current assessment of your new home, not the one used by the previous owners.

Asset Protection

Florida is famous for its residents’ constitutional protection against having their primary residences (or equity) seized and sold to satisfy creditors, regardless of that property’s value. The house in question can be single-family, condo, mobile, or manufactured home. In the city, up to 1/2 an acre is included, while if you live outside the city, you’re allowed 160 contiguous acres. This exemption extends to the proceeds of a home sale–provided that money is set aside to purchase a new Florida home. There is no waiting period for one’s homestead status to become effective; just move in. This last step is crucial, however; the exemption doesn’t extend to a home you’re building.

As any Sarasota lawyer can tell you, however, there are situations in which the homestead exemption doesn’t apply. These are: tax liens, a mechanic’s lien (for home repairs and remodeling), HOA fees and, of course, mortgages. If you’re facing foreclosure, or cannot pay your debts, consult a bankruptcy lawyer; Sarasota has highly qualified attorneys who can help.

Remember, only residents who have lived in Florida for two years before filing are entitled to Florida homestead exemptions in bankruptcy. In order to protect your homestead interests, it’s important to establish Florida residency by:

  • Obtaining a Florida driver’s license and car registrations
  • Filing a Declaration of Domicile in Florida, and informing your previous state of residence
  • Paying federal income taxes as a Florida resident
  • Registering to vote in Florida

Should you have doubts as to whether you should file a Florida bankruptcy, contact a Bankruptcy Lawyer Sarasota. Attorneys are experienced professionals.

Homestead and Inheritance

In this instance, Florida law protects the interests of your spouse and minor children after you die and, in so doing, can become confusing. When you die, your surviving spouse, if any, inherits your protected homestead through right of survivorship. If she (or he) is not on the deed, she is entitled to a “life estate,” and the house passes to your surviving children (divided equally) after she dies–unless she chooses to divide half of the property between those children while she’s living. Should you leave only surviving minor children, you can either arrange for a guardianship, or establish an irrevocable trust to oversee the transmission of your homestead exemption. Whatever your circumstances, when it comes to estate planning, you’ll need the guidance of a Sarasota lawyer.

As a citizen of the state of Florida, you enjoy some of the most liberal homestead protections in the nation. However, the legal maze can be bewildering. Whether you need a tax, estate, or bankruptcy lawyer, Sarasota lawyers are there to help.

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