Are Proceeds From a Reverse Mortgage Protected Under Florida Homestead Law?
Yes. Proceeds from a reverse mortgage of a Florida homestead can be exempt from creditor attachment.
Reverse mortgages tap into home equity by providing a lifetime income stream in exchange for a mortgage on your residence.
A creditor probably cannot garnish future payments from a reverse mortgage on a homestead. However, payments received and deposited in the debtor’s financial account would no longer be exempt even if payments were deemed proceeds of homestead equity unless the bank account is otherwise exempt from creditors.
Money from the sale or finance of a homestead is only exempt in a bank account if the money is segregated and intended to purchase a new homestead within a reasonable time. Using reverse mortgage proceeds to directly purchase an exempt financial asset, such as an annuity, could extend the protection.
About the Author
Jon Alper is a nationally recognized attorney specializing in asset protection planning. He graduated with honors from the University of Florida Law School and has practiced law for almost 50 years.
Jon and the Alper Law firm have advised thousands of clients about how to protect their assets from creditors.
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