Homestead Exemption While Working In Another State

ByJon Alper Homestead Exemption

I received another homestead inquiry this past week from someone who caller owned a primary residence in Florida and is temporarily moving out of state. This caller is  a self-employed technology consultant to large businesses. He  incurred a money judgment from a failed business deal. He has a long-term consulting contract in Ohio and wants to rent his house while working on this assignment. He asked whether he can sign a lease for his Florida home without losing its homestead exemption.

A debtor may move away temporarily from his homestead and maintain the homestead exemption as long as he intends to return. Leasing the homestead by itself indicates that the debtor intends to convert the home to an income producing investment. The determination depends on all relevant facts including, for instance, whether the debtor buys or just rents a residence in another state during his consulting job and whether the debtor changes his drivers license and IRS address to another state.

If this debtor’s business frequently involves consulting engagements in other states followed by a return to his home suggests that these absences from Florida, however long, do not demonstrate an intend to abandon the Florida home as his primary residence.
I think this debtor may rent his Florida home while he is working out of state. The shorter the term of his lease agreement with the tenant the better his legal argument that he is not permanently converting the house to an income investment. He should rent, not buy, a home in the state where he will be working as a consultant, and he should keep his Florida drivers license and car registration.

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Jon Alper is an expert in asset protection planning for individuals and small businesses.

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