Florida Homes and Condos for Sale

The most popular opinion why people live in or move to live in Florida is the great weather and lifestyle. But realistically, there are other places with nice weather – so what else makes Florida so attractive?  From a lawyer’s perspective the answer is pretty clear: Some call them the "Two Attributes":  (1) Favorable tax laws, no individual income tax, estate tax, gift tax or generation skipping transfer tax; and (2) amazingly debtor friendly asset protection laws.

Some of the benefits listed above are there without the resident taking any affirmative action, however many of the debtor benefits are there only if the resident is pro-active to avail him or herself of these benefits. A Florida lawyer familiar with these attributes should be able to guide a client to take full advantage of the protections.

Here is a very brief summary:

Estate Tax –

Florida’s Constitution provides that the state cannot impose an estate or inheritance tax that exceeds the amount allowed as a credit or deduction against the estate tax imposed by the USA.

Income Tax –

Florida’s Constitution prohibits the imposition of an income tax.  Individuals who are domiciled in Florida could be subject to income tax in another state if he or she maintains certain connections (not necessarily residences) in another state).

Gift Tax –

Florida does not have a gift tax.

GST Tax –

Florida does not have a generation skipping trust.

Intangible Tax –

Beginning 2007, the Florida intangible property tax was abolished.

Homestead Property –

Florida exempts real estate that is classified as “homestead property” from the claims of creditors, meaning a lien can be filed but it cannot be enforced on homestead property.  Homestead property is typically the residence of the Florida domiciliary in Florida.  To take advantage of the protection, the homeowner must own the property personally (not in a corporation) although a revocable trust is also deemed an “individual”.  There are certain instances where the homestead protection is waived or not applicable, such as a mortgage on the property, real estate taxes, certain federal tax liens, homeowner association liens, and liens from obligations for improvements to the property by contractors.  Don’t confuse the asset protection homestead with the real estate tax exemptions (allowances).  The two are different.

Life Insurance –

Life insurance proceeds are solely the property of the beneficiary and are exempt from creditors of the insured.

Annuities –

The cash surrender value of life insurance policies and the proceeds of annuity contracts issued to a Florida resident are exempt from any lien from creditors.

Retirement Benefits –

Money or other assets payable from a qualified retirement / profit sharing plan are exempt from creditors of both the participant and the beneficiary.

HSA’s (Medical Savings Accounts) and College Funds –

These accounts are protected from creditors.

Property Owned by Tenants by the Entireties –

This is one of the most overlooked exemptions.  Many married couples have bank accounts and brokerage accounts that do not specifically identify the account as owned by the couple as married to each other. Typical errors create tenant in common accounts or joint tenant with right of survivorship accounts and the unwitting married couple, through proper intention by improper account paperwork, often miss this important creditor protection.  Needless to say, if the debt is both the husband and wife’s, the tenants by the entireties status will not protect the asset – but if the debt is only incurred by one spouse, then the exemption works.

Florida is STILL a wonderful place to visit, live and work – and to be protected from many a creditor attempt to collect monies if you are a debtor.

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Copyright 2011 by Richard P. Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make.  This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660  RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide!  Shortsales@Florida-Counsel.com  New Website www.Florida-Counsel.com.

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