When a typical Florida homeowner thinks of homestead laws, their first thought is usually of reduced property taxes. Florida’s homestead laws cover more than just property taxes; they also govern creditor rights and how homestead property can be distributed at death.

A Florida resident is entitled to two tax benefits for their homestead residence. The first benefit allows for a $50,000 reduction to the assessed value of the residence. The second benefit, known as the “Save Our Homes” cap, provides that the annual increase in the homestead property’s assessed value is limited to the lower of 3% or the percentage change in the consumer price index from the prior year.

The creditor protection aspects of homestead laws are significant. A Florida resident who owns a residence on up to one-half (1/2) acre inside a municipality or 160-acres outside a municipality, and occupies the property as their primary residence, is generally protected from creditors’ claims. There are exceptions to this rule, notably the residence owner is not protected from mortgages securing the property, mechanics liens, property tax liens, or IRS tax liens against the homestead. Thus, most creditors simply cannot force the sale of the homestead residence to settle their claim.

Distribution of the homestead residence after death, if the owner is survived by a spouse and/or minor children, is limited to the spouse and/or minor children, depending on the circumstances. The only circumstances that allow an owner the freedom to distribute the homestead residence without restriction at death are when the owner has no minor children and is either unmarried or is married with a valid marital agreement in place.

Florida’s homestead laws are nuanced, particularly the laws surrounding the distribution of homestead property at death. You should consult with an attorney about how these laws impact what may be your most valuable asset.