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The Top 5 Ways Floridians Protect Their Life Savings

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The Top 5 Ways Floridians Protect Their Life Savings

July 15, 2022
Geoff Hoatson

An experienced asset protection attorney can help you develop a protection plan for your assets. But before you search for an “asset protection attorney near me,” we advise that you expand your knowledge regarding different kinds of asset protection.

Please note that, while similar, asset protection can describe either your efforts to protect your finances during your lifetime or those that occur after your death, while estate planning describes legal arrangements to settle your estate and protect your family’s inheritance after your passing.

1. Homestead Property Asset Protection

The Florida State Constitution describes several homestead exemption conditions in Article X, Section 4. The following are exempt from creditor liens or a forced sale after the owner passes away and the property is inherited by a surviving spouse or heir:

  • A homestead of up to 160 acres in any Florida county outside a municipality OR up to ½ acre within any municipality, limited to the primary residence of the owner or the owner’s family
  • Personal property valued up to one thousand dollars

A “homestead” can mean a single-family home, manufactured home, mobile home, or condominium.

The homestead exemption ensures that your home will stay protected from creditors trying to claim debt repayment after your death. Exceptions to this rule include unpaid taxes or other government debts, and divorce proceedings. The IRS can legally place a lien on your homestead to reclaim owed sums even if your property meets the standards displayed above. Divorces, on the other hand, require full disclosure of assets, meaning your divorcing spouse may be able to claim a stake in the homestead.

To determine if your home qualifies for homestead exemption, contact an asset protection law firm near you and speak with an experienced asset protection attorney.

2. Life Insurance and Annuities

Life insurance and annuities offer different levels of asset protection. With life insurance, the policyholder pays into the policy until they pass away. They name beneficiaries to receive the policy amount after death. Life insurance is exempt from the policyholder’s creditors but not from the beneficiary’s creditors upon payment of the policy.

An annuity is considered a long-term investment plan. They are issued by insurance companies and are meant to provide a peace of mind in case you outlive your income. Annuities are fully protected, as are the funds that have already been received. However, for asset protection, the annuity funds should be kept in a separate account, or at the very least, the capability to trace funds from a bank account to the annuity should be maintained at all times.

3. Retirement and Wage Account Protection

Federally, as well as in the state of Florida, pension and retirement plans like 401k accounts and IRAs are exempt from creditors. In Florida, inherited IRAs are also exempt. However, if you have children outside of Florida, inherited IRAs may not be exempt in their states, and your children’s creditors may be able to claim those assets.

If you intend for children outside of Florida to inherit your IRA, consider changing the beneficiary of your IRA to a trust so you can protect your assets for your children. An asset protection lawyer can help you determine the best way to ensure that your children in Florida or another state will receive your retirement and wage account funds.

4. Limited Liability Entities

Individuals and families can create a limited liability company (LLC) to protect their assets in Florida. However, a single-member Florida LLC may be liable for creditor debts due to a ruling by the Florida Supreme Court in 2010. As such, only multi-member Florida LLCs offer protection against creditors.

Contact a reputable asset protection law firm for more information about creating an LLC to protect your assets.

5. Revocable or Irrevocable Trusts

With a revocable or living trust, you can add or remove assets and name new beneficiaries, along with making other alterations, during your lifetime.  A revocable trust offers no protection from creditors until the grantor’s death, at which point it becomes an irrevocable trust.

An irrevocable trust offers protection from creditors from the moment it is finalized. However, if you wish to make any changes, these must be court-ordered or approved unanimously by all of the trust’s beneficiaries.

Contact Our Team at the Family First Firm to Protect Your Assets in Florida

Whether you’re looking to protect your assets and manage debts for late-in-life care or to protect the inheritance you plan to leave for your family, you need the knowledge and experience of an asset protection attorney. A skilled attorney can help you keep your real estate, accounts, and personal belongings safe from creditors.

Life happens quickly. The best time to get started on your asset protection plan was yesterday. Our legal team at Family First Firm - Medicaid & Elder Law Attorneys is ready to help you with your asset protection or estate planning needs. Call us at (407) 574-8125 or fill out our online contact form to discuss your legal options today!

Copyright © 2024. Family First Firm - Medicaid & Elder Law Attorneys. All rights reserved.
The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information in this post should be construed as legal advice from the individual author or the law firm, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting based on any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.
Family First Firm – Medicaid & Elder Law Attorneys
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