Florida Exemptions

 Some rights reserved by 401(K) 2013Florida has specifically designated certain items as exempt. Exempt from what, exactly? It depends on the situation, but these statutes cover exemptions from probate, estates, creditors, judgments, and more.

Let us start with homestead property. Florida State Statute 222.01 discusses how homesteaded property shall be exempt from forced sale for most types of judgments. Listed exceptions are:

 (a) Liens and judgments for the payment of taxes and assessments on real property.

(b) Liens and judgments for obligations contracted for the purchase of real property.

(c) Liens and judgments for labor, services, or materials furnished to repair or improve real property.

(d) Liens and judgments for other obligations contracted for house, field, or other labor performed on real property.

Then there is Florida’s exemption of some wages. Florida State Statute 222.11 states that All of the disposable earnings of a head of family whose disposable earnings are less than or equal to $750 a week are exempt from attachment or garnishment.”  (It goes on to discuss earnings over $750 a week, etc.) Some limited protection is also applied to funds deposited in a bank under this $750 week rule, as long as procedures are followed to prove it is exempt.

Life insurance proceeds are also mentioned, in Statute 222.13. There it states that life insurance money “shall inure exclusively to the benefit of the person for whose use and benefit such insurance is designated in the policy, and the proceeds thereof shall be exempt from the claims of creditors of the insured unless the insurance policy or a valid assignment thereof provides otherwise.” It goes on to say that if the life insurance is designated to go to the insured or its estate, it does not get the same protection and is not exempt. Statute 222.14 further discusses life insurance, in the form of cash surrender life insurance (and annuity policies). These policies are treated a little differently than traditional life insurance policies. Unless this policy was specifically created to pay off a creditor, the money from these types of policies “shall not in any case be liable to attachment, garnishment or legal process in favor of any creditor of the person whose life is so insured or of any creditor of the person who is the beneficiary of such annuity contract”. The listed difference here is that the money is also protected from creditors of the person receiving the money. Disability payments are exempt from creditors, unless there are provisions for a policy stating otherwise.

Bankruptcy is mentioned in Statute 222.20. Here the statutes explain that “In accordance with the provision of s. 522(b) of the Bankruptcy Code of 1978 (11 U.S.C. s. 522(b)), residents of this state shall not be entitled to the federal exemptions provided in s. 522(d) of the Bankruptcy Code of 1978 (11 U.S.C. s. 522(d)). Nothing herein shall affect the exemptions given to residents of this state by the State Constitution and the Florida Statutes.” Statute 222.201 clears that up a little more.

Retirement accounts are next in the list of exemptions. Statute 222.21 says, among other things, “Except as provided in paragraph (d), any money or other assets payable to an owner, a participant, or a beneficiary from, or any interest of any owner, participant, or beneficiary in, a fund or account is exempt from all claims of creditors of the owner, beneficiary, or participant if…” It goes on to discuss the specific requirements that the account must have to qualify for this protection. (Further down, qualified domestic relations orders are mentioned, as well as direct transfers and eligible rollovers. These situations change the rules and depend on each situation.)

Many types of tuition accounts, medical savings accounts, and hurricane savings accounts are exempt from creditors being able to garnish or seize them. They must meet certain requirements, as written in Statute 222.22.

Statute 222.25 goes on to cover the remaining items exempt from legal process. It mentions property like $1,000 interest in a motor vehicle, prescribed health aids, certain tax monies, and property not exceeding $4,000 if the homestead exemption wasn’t already taken.

The Statutes sum up this section on homestead and exemptions by discussing how fraud and fraudulent transfers are a game changer. Anything relating to fraud might not be exempt, once the fraud is found.

Attorney Christopher D. Smith with SmithLaw Attorneys knows the ins and out of Florida law when it comes to exemptions. He is available by calling 941-907-4774.

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