Any bank will tell you that your money is safest in that bank’s vault. It is not. Quack radio will tell you that your money is best invested in gold or, at Christmas, frankincense or myrrh (although without Google, I have no idea what that is), or today maybe even in a boatload of CBD. None of those possibilities is the right answer.
Two years ago, I had an opportunity to make a motion in a place where it would count, to change the Florida Constitution on the subject of Florida homestead. I made the motion to the Constitutional Revision Commission to provide that in the event a person was guilty of a crime against others in a way that benefitted the criminal, a court would have jurisdiction to invalidate his homestead exemption to pay his creditors. The proposal did not require conviction of the crime, but did require a judgment against the accused. The governor had powerful friends who, for reasons known to them and the then governor, could not hear of such heresy. The proposal went nowhere in the governor’s committee.
As a result, if you are a resident of Florida and you own a home, you cannot commit a violation of the law that will cause you to lose your home, even if it’s worth millions, and even if you spent years stashing away the proceeds of a criminal enterprise in your beachfront mansion. That, it seemed to me, was a ridiculous anomaly for those of us who had no probability of either to have, or to warehouse, millions of dollars in a beachfront mansion. (An example of that might be a certain USC running back who walked from a murder conviction but couldn’t avoid a judgment for his damages to others.) My thoughts were that no one should benefit by immunity from judgment for his own intentional acts. That governor did not agree, and today, if you have savings that you can accumulate by paying down the mortgage on your home, do it. By Constitution, the equity in your home cannot be reached by your creditors. That is also true, incidentally, for the financial account you fund when you sell your home as long as you can identify the money.
We had a real-world example of that right here in Walton County. A homeowner maimed, and only by accident, did not kill his girlfriend. He did, however, disfigure her forever. The judgment, if it had mattered, would have cared for her for a long time. His estate was considerable. She got none of it because of Florida homestead.
Contrast that with any other asset you own. If your creditors know you have it, and they will likely find it, they can require that it be sold to satisfy your debts, regardless of how much you think you need it, or how long you’ve owned it.
Your own lawyer will tell you that this absolute immunity from the claims of creditors has some exceptions, such as the mortgage you sign to buy your house, or the value of any work you authorize to upgrade or maintain your home. But generally speaking, even your bank savings are not so well protected.
So, remember the rule: money in the bank is good, at least to a degree. Equity in the place you live, if it is your Florida homestead, is also good, and as protection from creditors, even better.
