Each state has different asset protection laws. Florida's asset protection laws are considered one of the most liberal ones. Therefore, it is a good idea to discuss your case with an estate-planning attorney with expertise in asset protection to take advantage of the liberal asset protection laws of Florida. Florida's asset protection laws apply to permanent residents and people in other states with property in Florida. Florida's asset protection laws are based on several legal sources: the Florida Constitution, Florida Legislature, and common law. Courts also establish asset protection through their interpretation of provisions of the constitution, statutes, and common law.
Florida assets protection laws provide many options to protect your assets from creditors. People anticipating substantial civil judgments often move from other states to Florida to become a resident for asset protection purposes. For example, OJ Simpson took advantage of Florida's asset protection by purchasing a large estate in Florida in part to avoid creditors.
4 Key Asset Protection Exemptions for Florida Residents
1. Homestead exemption: Article 10, section 4 of Florida's Constitution provides that the homestead is exempt from forced sale under process of any court. In a nutshell, it is nearly impossible for creditors to force the sale of a homestead. Florida's homestead exemption also protects spouses and children of decedents: a spouse cannot transfer the property by Will if survived by a spouse or minor child.
2. Life insurance and annuities: Florida statutes section 222.14 provides that the cash surrender values of life insurance policies issued upon the lives of citizens or residents of the state and the proceeds of annuity contracts issued to citizens or residents of the state are not subject to attachment, garnishment or legal process in favor of any creditor of the person whose life is so insured or of any creditor of the person who is the beneficiary of such annuity contract (unless the insurance policy or annuity contract was effected for the benefit of such creditor).
3. Qualified plans, IRAs and pension: These are fully exempt if the federal requirements are met. Florida statutes section 222.21 provides that any money or other assets payable to an owner, a participant, or a beneficiary from, or any interest of any owner, participant, or beneficiary in, a fund or account is exempt from all claims of creditors of the owner, beneficiary, or participant if the fund or account is:
- a. Maintained in accordance with a master plan, volume submitter plan, prototype plan, or any other plan or governing instrument that has been preapproved by the Internal Revenue Service as exempt from taxation.
- b. Maintained in accordance with a plan or governing instrument that has been determined by the Internal Revenue Service to be exempt from taxation .
- c. Not maintained in accordance with a plan or governing instrument described in point a or b, if the person claiming exemption under this paragraph proves by a preponderance of the evidence that the fund or account is maintained in accordance with a plan or governing instrument that is in substantial compliance with the applicable requirements for tax exemption or would have been in substantial compliance with the applicable requirements for tax exemption but for the negligent or wrongful conduct of a person or persons other than the person who is claiming the exemption under this section
For a Florida estate planning attorney with experience in asset protection law, call the Law Office of David M. Goldman PLLC at (904) 685 - 1200 or click the "Contact Us" tab at the top of this page.