Florida Homestead in your Revocable Trust Gains Bankruptcy Court Favor (but
not ours)!
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Welcome to another edition of Cox &
Nici's E-News where we inform you about current legal issues that may affect
you and your loved ones.
Should Florida Homestead Be Owned By A Revocable Trust? Two recent cases
decided by the Federal Bankruptcy Court for the Middle District of Florida (one
in Orlando and the other in Tampa) have confirmed that the courts will now allow
homestead protection from forced sale for a Florida homestead owned by a
person's Revocable Trust. No longer will the courts give weight to the argument
that a Revocable Trust is not a person entitled to our Consitutional homestead
creditor protection. Now, the court will consider whether there is a legal right
to use the property as a residence, whether there is an intention to make the
property into homestead property and whether the property is actually maintained
as a principal residence. If all three are satisfied, then the property is
entitled to protection from creditor's claims. It is important to note that
these decisions do not affect the Homestead property tax exemption, the "Save
Our Homes" cap on property tax increases, nor the restrictions on bequeathing
homestead property at death.
So, do we recommend putting your homestead property into your Revocable Trust?
NO! The benefits don't outweigh the costs. Besides having to re-title the
property into the revocable trust via deed, you will have to re- apply for the
homestead property tax exemption. And, there will likely be difficulties after
death, when there must be an official determination of homestead status. That
determination is routinely made by the Probate Court as part of an estate
administration. If the homestead is not probate property (because it is in a
Revocable Trust), the Probate Court cannot determine its homestead status.
Rather, the Trustee of the Revocable Trust must bring a very costly and time
consuming quiet title action or other declaratory judgment action to declare the
property exempt from creditor's claims.
Thank you for reading this issue of Cox
& Nici's E-News. Please visit our website or call us for more information
regarding this subject or to answer any other questions you may have.
If you wish to contact Joe B. Cox or
James R. Nici directly, DO NOT REPLY to this email! Regarding legal
inquiries, contact Joe B. Cox at jcox@coxnici.com or James R. Nici at jnici@coxnici.com
.
Sincerely,
Joe B. Cox, Esq. and James R. Nici, Esq.
Cox & Nici
