Florida's Asset Protection Laws

The following is a general overview of asset protection laws for legal residents of Florida. This is provided for informational purposes only and residents should seek professional advice in making real estate, estate & financial planning decisions.

Florida exempts certain classes of assets from collection from most, but not all types of creditors. These protections are available only to those who are legal residents of Florida and are considered by many to be the strongest and most wide ranging creditor protection laws in the country. Protection can be immediate. Some of the protected asset classes are:

• Annuities, life insurance proceeds and life insurance cash value

• Up 1/2 acre of declared homestead property within a city’s limits and 160 acres within a county

• Head of household wages

• Retirement funds including IRAs, 401Ks & Roth IRAs & social security

• Disability income, unemployment income, worker’s compensation, veterans benefits

• Prepaid college funding, medical savings accounts, earned income credit from your taxes

Florida’s Constitution defines a Florida homestead property as a principal place of residence subject to size restrictions. Protection is provided to residences within a city’s limits on lots of up to one-half acre and to residences outside a city’s limits up to 160 acres. Property up to 160 acres is included in a homestead even if the property has separate legal descriptions and tax numbers. There are no restrictions on the square footage of the physical residence or the value of the property. If you own the home you live in, your home is protected from all creditors except those holding a mortgage or lien on your residence. This also applies to mobile homes.

Under most circumstances, a lien cannot be placed on your home for a debt that has nothing to do with your home. However, creditors who lend you money to buy, improve or repair your home may put a lien on your home. Nonetheless, if a creditor has a mortgage on your home, no matter what the purpose of the mortgage, you are not protected by the homestead exemption.

To protect your home, an affidavit describing your home and claiming it as your homestead must be filed with the court. This is different from the homestead tax form you file with the county property appraiser every year. Florida Statute 222.01 provides the type of notice and affidavit you will need to file.

If you do not claim the homestead exemption described above, you have the right to claim a personal property exemption of up to $4,000 per person. Unless the judgment creditor has a lien or security interest in the property (for example, a furniture loan), you can protect up to $4,000 of your personal belongings. Note that this exemption does not apply to child or spousal support debts. If you own more than $4,000 worth of personal property, you can choose which property to protect. The personal property can include money held in a bank account.

You also can claim an exemption of up to $1,000 of the value of your vehicle under Florida law. This means that your vehicle cannot be taken to satisfy a judgment unless the value of the car, less all debts for which the vehicle is collateral, is greater than $1,000. You can combine the $1,000 vehicle exemption with the $4,000 personal property exemption. In this case, for example, you would be able to claim a total exemption of $5,000 for your vehicle.

If a judgment is against only you and not your spouse, your spouse is entitled to protect his or her interest in the property. Property that is held by a husband and wife is called tenancy by the entirety and cannot be divided. This means jointly held property is not subject to the claims of creditors of the husband or wife individually. This applies to real property as well.

If a person makes $750 or less per week in net wages, and the person is a head of family, those wages are exempt from collection. A head of family is a person who provides more than one-half of the support for a child or other person. Wages in a bank account that belong to a head of family retain their protection from being seized for six months, even if the wages are mixed with money from other sources.

If you need assistance with establishing your exemptions to protect your income or property, please contact your local legal services or legal aid office or a private attorney who practices in consumer law. Forms and instructions for asserting your exemptions often are available free of charge from your local legal services or legal aid office, or from your county’s clerk of courts office.