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 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.