Florida Homestead Protection After Death

The Florida homestead protection works even after a judgment debtor’s death.

A Florida homestead property is exempt from judgment creditors during the owner’s lifetime by virtue of the homestead provision of the Florida Constitution. A judgment lien does not attach to one’s homestead residence. Many debtors fear that their judgment creditor’s lien will automatically attach to the homestead property when they die and then no longer reside in the property.  Or, what if during the owner’s final illness the owner is moved to a long term care facility so that that the owner no long resides in the homestead property during their final months or years. Does a judgment lien attach to property because the owner has moved out of the house to a long term care residence or hospital.? One of my clients last week expressed concern that their parent’s creditors would take the family house because their elderly parent was hospitalized for over a month with a terminal illness leading to their death.

The Florida homestead exemption protects the decedent owner’s primary residence while they are alive as long as they have not abandoned the property. People can temporarily leave their homestead and retain homestead status if they “intend” to return. Most courts will not consider a relocation for illness as an abandonment of homestead. Courts assume people intend to get better and go home again. Therefore, moving to a care facility prior to death should not jeopardize homestead protection.

The answer is that the Florida homestead exemption protects the owner’s primary residence from creditors after death even though the decedent does not then occupy the property. A judgment lien recorded during the owner’s life does not attach to the residence after the owner’s death.

Does Selling a Decedent’s Homestead Require a Probate Proceeding? 

If a decedent owns assets in his own name at death the decedent’s heirs need to open a probate proceeding to transfer legal title to the assets after first using the probate assets to pay  claims filed by the decedent’s creditors, if any. Assets owned by the decedent and requiring probate comprise the “probate estate.”  The decedent’s homestead is not part of the probate estate. The probate estate includes only assets that are subject to creditor claims, and the homestead is exempt from creditors so it is not part of the probate estate.

Most people use a living trust to express their estate plan. An unmarried individual typically owns his homestead residence in a living trust. A living trust avoids probate of all assets titled in the name of the trust. Families expect to avoid the cost and delay of probate when the parents have transferred all assets, including their homestead residence, to a living trust. However, creditors may open a probate to assert claims against living trust assets other than the exempt homestead titled in the trust.

Surviving family members assume that they can freely sell the parents’ homestead once they understand that the homestead is not subject to claims against their parents’ estate, and particularly if the homestead was titled in a living trust. Unfortunately, the family’s sale of a parents’ homestead can be more complicated. Title companies will not insure the sale of a decedent’s homestead unless the title examiner is sure  that the property was an exempt homestead, free of potential creditor claims. A title company knows from the public records that a deceased parent owned their home. But it is not clear from the public records that the house was the parents’ homestead because  public records do not indicate whether an owner resided in a property at or before death. Even though owner may have previously applied for a homestead tax exemption there is nothing recorded in real estate records identifying the occupant of the property. The deceased parent may have abandoned residency before death and, for example, lived with a child or in an apartment and rented the property to a tenant.

Title companies sometimes insist on a court order that the property was the owner’s homestead through death in order to insure a sale after death when there are creditor claims against the deceased owner. A court order requires a court proceeding, and the appropriate court proceeding is a formal probate. As a result, surviving family  wanting to sell the parents’ former residence may have to open probate even if the parents conveyed the house to a living trust and there are no probate assets. The sole purpose of the probate is filing a court petition  to declare the decedent’s residence to be their exempt homestead. The probate court routinely grants an order determining homestead status. This order ensures that the house is exempt from unknown claims and leads a title insurance company to issue insurance to potential buyers and their mortgage company.

Last updated on July 20, 2020

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