Now that very few things seem safe, it is a good time to think about the safety of your real estate. Real estate can be an individual’s most valuable asset, but it can also be one of the most fought after assets in recovery suits. Here are some things to consider:
Homestead Property. Owning a Florida homestead offers potential unlimited monetary protection from creditors, making homestead ownership one of the most powerful asset protection tools around. Florida homestead protection is only available to Florida residents as to their Florida homestead.
Entirety Property. Married couples owning property as “tenants by the entirety” are treated as “one” owner regardless of whether or not the property is their homestead. Other non-real estate assets can also be owned and protected in this manner. Because there is only “one” owner, a judgment against one spouse alone is not a lien against entirety property. However, non-homestead property can lose this protection upon the death of one spouse (as to the survivor’s creditors’ claims), or upon divorce (which operates to sever the entirety estate). Non-homestead entirety property is also not protected from claims against both spouses.
Corporate/Company Property. Putting property in the name of a corporation, LLC or other business entity can be an attractive option to individuals who want to keep their names out of the public records. In addition, real estate owned by a properly formed and operated entity is generally protected from claims against its individual owners.
Other Ownership Options. The factors that are unique to your individual needs and circumstances will determine whether one of the above strategies offers potential advantages to you. You may also wish to consider more advanced techniques, such as the creation of a trust, partnership, joint venture or other ownership vehicle, especially if you have complex tax or estate planning needs.
Real Estate Protection Limits. No matter how well your real estate is protected, no asset protection vehicle offers an absolute shield. Property taxes, IRS tax liens, homeowner or condominium association assessments, contractor liens, and the consequences of falling behind on your mortgage or filing for bankruptcy, are just some of the things to which your property will remain vulnerable. The above information is limited to Florida real estate only. If you own real estate outside of Florida, you should obtain the advice of an attorney in the state where the property is located.