Owning even the most successful business always involves some degree of risk. Despite your hard work and careful planning, a single lawsuit, accident, or bad investment can result in financial disaster. Therefore, you should always take steps to protect your personal assets from the reach of creditors to the greatest extent possible. Fortunately, the Florida asset protection lawyers at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. can help you take measures to secure your financial future and protect against potential creditor claims.
The Florida Homestead Exemption
Article X, Section 4 of the Florida Constitution states that a creditor who has a judgment against you for the payment of money cannot force you to sell your home to satisfy that judgment. Therefore, unlike in many states, a recorded judgment against you for a debt you owe does not become a lien on your Florida homestead.
The Florida homestead does not only include a single-family home. The definition of homestead is quite liberal and includes condominiums, manufactured homes, and mobile homes. The only requirement is that the homeowner possesses the residence with the intent to make it their permanent residence. There is no waiting period for the homestead exemption to become effective;.
The monetary value of the homestead is unlimited, making Florida’s homestead exemption one of the strongest in the country for asset protection. Within municipalities, the homestead exemption applies to lots up to one-half acre; outside municipalities, the exemption applies to up to 160 acres, even if the adjacent property has separate legal descriptions or tax numbers.
Joint Ownership and the Florida Homestead Exemption
Joint ownership can jeopardize the homestead exemption if one of the owners does not use the homestead as their primary residence. For example, if a creditor obtains a judgment against the non-resident joint owner, the judgment becomes a lien on the joint owner’s interest in the property..
Fraudulent Conversions and the Homestead Exemption
Another benefit of the Florida homestead law is its exemption from the state’s fraudulent conversion statute. As a result, individuals can transfer unprotected nonexempt assets to protected homestead assets at any time by purchasing a new residence or using the assets to pay down the principal balance of an existing mortgage on their primary residence. Even if the sole objective of the transfer was to protect the nonexempt funds from the reach of creditors, Florida law does not consider it a fraudulent conversion. However, different rules apply in the event of bankruptcy.
The only other exception to this general principle is if the individual obtained the money by deceit, fraud, or other misconduct and then used the proceeds to purchase or improve their homestead. For example, suppose the creditor can prove that the homeowner fraudulently obtained the money to purchase or improve the homestead. In that case, the creditor may be able to place and foreclose a lien on the property.
Call Us Today for Assistance with Your Business Needs
The Florida asset protection attorneys at Kramer, Green, Zuckerman, Greene & Buchsbaum, P.A. offer comprehensive legal services so that we can protect your personal assets from the potential reach of creditors when you operate a business. However, we also offer the full range of business-related legal services, whether you are starting, operating, or dissolving your business.
As a result, we can help you navigate the complex legal problems that may occur when operating a business in the most efficient manner possible. Call us at (954) 966-2112 or find out more about our legal services online. Set up a time to talk to us about your legal needs today.