In some states such as Florida, Oklahoma and Texas that offer either
unlimited or nearly unlimited homestead protection, the opportunity exists for a
debtor to protect literally millions of dollars in her personal residence.
Indeed, the statutory homestead protection is one of the strongest asset
protection tools available. Yet, even homestead protection has significant
defects, including:
Homestead does not protect against
federal tax liabilities, or state tax liabilities of the
state where the property is located.
Homestead only protects a primary
residence, not vacation homes.
Homestead traps the value of the
residence within the debtor's estate. You may or may not
get sued, but you will die.
Because of these concerns, some owners of valuable
residences seek advanced solutions to attempt to protect the
value of their residence and to transfer that value outside
of their estate.
Our state-by-state resource of each state’s homestead
statutes and to key opinions interpreting the homestead
exemptions in each state:
Filing for Exemptions and Forms
Please note that we do not assist persons with filing for their homestead
exemption, nor do we sell or provide any forms for this purpose.
Persons desiring
such should either contact their local attorney, or often the office of their
local county clerk or registrar of deeds, for such information and forms.
Please do not contact us for assistance in filing for homestead
or to request forms.
Homestead and the New Bankruptcy Reform Act
Most significant is the limitation of the state homestead exemption in bankruptcy
to $125,000, regardless of state law providing for a larger or unlimited
exemption. This limitation applies to homestead interests that are acquired
within a 1215-day (3 years and 4 months) period prior to the filing of the
bankruptcy petition. However, if the debtor has a claim arising from violations
of federal or state securities law, RICO, fiduciary fraud, or from certain
crimes or intentional torts, then the cap is $125,000 regardless of when
the property was acquired. Rollovers of exempt homestead interests are not
allowed even if those interests were exempt in both states. Thus, the debtor
who moves from Texas to Florida will re-trigger the 1215 day period, despite
the fact that both states have unlimited homestead exemptions.
Obviously, it will no longer be possible for debtors to wait until they
have been sued to try to move to a state with an unlimited homestead exemption.
Not so obviously, financial professionals and corporate officers or directors
should now reconsider the idea of maintaining significant equity in their
residences; if such a person ends up on the wrong end of a judgment, the
debt may be one that will limit the homestead exemption in bankruptcy to
$125,000, regardless of the length of residence in the state.
This website is
by far the largest and most comprehensive creditor-debtor
and asset protection resource available anywhere. This
website hosts thousands of pages of articles, cases,
statutes, analysis, and many other resources to assist
planners and judgment collection professionals in
researching contemporary creditor-debtor issues.
While the articles and analysis on this website are most often
drafted from a planner's point of view, creditor attorneys and
judgment collection professionals will also find many of these
resources to be highly useful. We have tried whenever possible
to be balanced in our analysis by pointing out strengths and
weaknesses in different structures and strategies from both the
planner's and creditor's viewpoint.
This website was primarily created to support our book
Asset Protection: Concepts and Strategies
(McGraw-Hill 2004). Because of the publishing agreement with
McGraw-Hill Companies, Inc., certain articles which were used as
the basis for that book have been withdrawn from internet
publication. It is suggested that the book be used as the
primary resource, and that the other materials on this website
should be used as supporting materials only as needed.
Our newsletter Developments in Asset
Protection and Wealth Preservation covers new cases and
events in wealth preservation planning, creditor-debtor law,
and asset protection. It is widely used by other
professionals to keep them apprised of the latest changes in
the law. And it's free!
Nothing in this website is any substitute for the legal advice or opinion of a licensed attorney in your state. This website is simply a starting resource for information on the topics herein and does not claim to provide any definitive answer and should not be relied upon for any purposes whatsoever. Non-professionals should seek the assistance of a licensed attorney in their jurisdictions, and professionals should please consult the primary source materials such as statutes and case laws directly. Nothing in this website may be relied upon under IRS Circular 230 to avoid penalties for an incorrect tax position.
Adkisson Publishing Inc. is not a law firm and does not provide any legal service of any nature whatsoever. Adkisson Publishing Inc. is a publisher of books, websites and provides speakers on various topics. The person responsible for this website is Jay D. Adkisson in his capacity of President of Adkisson Publishing Inc. and questions regarding it should be addressed to him at Adkisson Publishing, Inc., P.O. Box 7088, Laguna Niguel, CA 92677.
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