Homestead Account Exemption When Moving To Another State

A client is planning to sell her Florida homestead and move to Texas where she would buy a new homestead property. She wants to know if sales proceeds from the Florida homestead is exempt in a segregated bank account while she is looking for a house in Texas. Texas also has unlimited homestead exemption.

The proceeds from the Florida homestead sale is protected in a segregated bank account for a reasonable time while the debtor/owner searches for a new homestead. However, as far as I know, all the cases dealing with exempt homestead accounts involved the debtor’s replacement of one Florida homestead with another Florida homestead. I’m not sure the debtor’s intent to buy a house in another state qualifies as the continuation of Florida’s homestead exemption. Most states have a cap on the homestead exemption. Until the debtor actually chooses his new homestead state a court could not determine who much money in the homestead account warrants exemption. What if this client changes her mind and moves to a state other than Texas?

In my opinion, a court will only exempt money in a homestead account that is intended to be reinvested in a new Florida home. The intent to leave Florida expresses an abandonment of Florida’s homestead exemption including sales proceeds.

Gideon Alper

About the Author

I’m an attorney who specializes in asset protection planning. I graduated with honors from Emory University Law School and have been practicing law for almost 15 years.

I have helped thousands of clients protect their assets from creditors. Before private practice, I represented the federal government while working for the IRS Office of Chief Counsel.