Hurricane Ian May Have Destroyed Your Property But It did not Destroy Your Homestead

Florida protects homesteads. This is true even if they are damaged or destroyed, and this protection carries on to insurance proceeds you may receive related to the homestead. However, this protection can be wiped out if you do not take the necessary steps to continue its enforcement. Do not let Hurricane Ian cause additional damage: the loss of the protection against creditors with respect to your homestead, afforded by the Florida Constitution.

Florida’s homestead protection is broad and powerful. It protects your primary residence if you live in Florida. “Homestead” in Florida law has several meanings. There is protection against rising property taxes (you must apply for that), there is protection for your heirs if you pass away (probate protection), and then there is protection against creditors. This discussion focuses on the protection against creditors and, as an aside, will include some things to think about in the event of your (or a family member’s) passing during the time your homestead is being repaired.

A Florida homestead is a Florida resident’s primary residence in Florida. In a municipality, a homestead is one-half acre of contiguous property. Outside of a municipality a homestead can occupy 160 acres. There are nuances that are outside of the scope of this short article. A condominium that is a Florida resident’s primary residence, including the share of common property, is a homestead. 

Florida law provides that your homestead cannot be attached by creditors. If there are judgments against you, none will attach to your homestead. There are exceptions for taxes and certain liens. Also, if you executed a mortgage or waived your rights, this can remove the protection with respect to just that mortgage or just that waiver (your other equity is protected). But generally, no one can take your homestead without you giving them permission. This right against creditors applies after you pass away as well. Certain of your heirs (spouse, children, other close family members) can inherit your homestead despite the existence of debts existing at the time of your death (again, this does not apply to your outstanding mortgage or taxes). There are prohibitions with respect to whom a homestead may pass in your will, as well. All of these protections and prohibitions apply to proceeds from homestead as well.

Generally, if you sell a homestead, keep the funds separate from your other money, and have the intent to buy a new Florida homestead, those funds have the same protection as the homestead you sold. This same protection applies to insurance proceeds received from damage to, or destruction of a homestead. If your home was damaged or destroyed, and you are receiving or have the right to receive insurance proceeds on that home, you need to take care to keep those funds separate from your other funds. Additionally, you should consult an attorney and be very careful about signing anything related to those proceeds – you might involuntarily waive the protections that you are entitled to under Florida law.

Besides taking care that you do not mix insurance proceeds related to your homestead together with other funds, and also being mindful of any documents you sign related to those proceeds, you should also take care to preserve the homestead protection in the event of your, or a loved one’s passing during the time of repair.

As mentioned above, the homestead rights related to creditors and heirs, can attach to the money received from insurance or on a sale of that homestead as well, if care is taken to preserve that right. You should protect your family’s right to the insurance proceeds in the event of your passing before they are paid or expended. Further, if you stand to inherit a homestead that has been damaged or destroyed by Hurricane Ian, you should make sure that you file the appropriate documentation to protect those proceeds from creditors of the deceased.

Florida law protects insurance proceeds related to a damaged or destroyed homestead. You should consider consulting a Florida attorney knowledgeable about Florida homestead laws with respect to these proceeds, whether they are yours or related to a homestead you may be inheriting. If you fail to take the necessary steps, your or a loved one’s creditors can take money they would otherwise not be entitled to, adding further loss caused by Hurricane Ian.