You can rely on a Florida asset protection lawyer at Kramer Green to work diligently to protect your assets from creditors to the greatest extent possible. Florida law provides exemptions for various assets from creditors so you can keep the wealth you have earned. Awareness of these exemptions can be critical as you take measures to preserve your assets for yourself and your family.
2022 Florida Statutes 222.01 et seq. outline many of the assets that are exempt from the reach of creditors. These exempt assets include some that commonly arise in collection actions and others that rarely arise. In this blog post, we will focus on the more common exempt assets that you may encounter.
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The Homestead Exemption
Florida’s homestead exemption is widely known as the most generous in the country. Under Florida law, individuals can exempt their primary residence of up to ½ acre within city limits and 160 contiguous acres outside city limits. In addition, there is no dollar limit on the value of the residence or real estate that the homestead exemption protects.
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Head of Household Wages
Wage garnishment is one of the most common wages that a creditor can collect a judgment from a debtor in a collections case. This continuing wage garnishment order remains in place until the judgment is paid in full. However, Florida law exempts the wages, salary, commissions, and bonuses of a “head of household” from garnishment. The disposable earnings of a head of household that are equal to or less than $750 per week are always exempt. However, disposable earnings of a head of household greater than $750 per week also are exempt unless the head of household has agreed to the garnishment or attachment in writing.
A head of household is a person who provides primary financial support for a family member or someone else whom the person has a legal or moral obligation to support. For instance, eligible dependents include parents and children. This exemption extends to wages even after the head of household has received them and deposited them into a bank account; wages retain their exempt status for up to six months after deposit into a bank account.
Nonetheless, it is important to note that business owners and other self-employed persons may be unable to take advantage of the head of household wage exemption. Business owners likely need to seek legal counsel and carefully structure their businesses to qualify for the head of household wage exemption.
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Retirement Accounts
All types of tax-deferred retirement accounts are exempt from creditors under Florida law. These accounts include pensions, 401(k) plans, and IRAs. This exemption also covers pension plans that are specifically provided for certain types of public employees, such as firefighters and police officers. As individuals often have most of their wealth in retirement accounts, exempting these assets may allow individuals to protect a large portion of their assets from creditors.
Florida law also specifically exempts defined benefit retirement plans, even if they have a sole owner participant, and therefore may not be covered under the Employee Retirement Income Security Act (ERISA). In addition, inherited and rollover IRAs also fall within the definition of IRAs that are exempt from the reach of creditors under state law.
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Life Insurance and Annuities
The cash value of an insurance policy that insures an individual’s life is exempt from creditors under Florida law. Likewise, annuities and their proceeds are exempt from creditors. Both these assets remain exempt even after an individual receives the funds and deposits them in a bank account. However, the proceeds may become non-exempt if they become untraceable due to being commingled with other funds or used to purchase other assets, such as real estate.
Allow Us to Help You Protect Your Assets Today
An asset protection attorney at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. is ready to assist you in protecting your personal or business assets from the reach of creditors. We know how hard you have worked to build your personal and business wealth and want to help you preserve it.
As a result, our objective is to take any actions necessary to protect your assets for your and your family’s benefit. Contact our office today at (954) 966-2112 or reach out to us online to schedule a time to discuss your legal issues with our attorneys.