Most of us want to leave as much of our property to our families as possible. But in many cases after someone passes away, they leave behind debts that must be paid, too. Many states, including Florida, have enacted laws to protect certain property. While developing your estate plan, take time to find out if you have property that is exempt from creditor claims.
Public notice is published when an executor a/k/a Personal Representative gathers the assets of an estate and files an application to admit a Will to probate. Anyone with a claim against the estate submits the claim and supporting documentation to the executor for review. Valid debts generally are paid from available funds before disbursements are made to beneficiaries.
Not all assets will be made available to pay claims. In fact, Florida law provides that the following property is exempt from creditor’s claims:
(a) Household goods kept at decedent’s home at the time of death up to a value of $20,000.
(b) Two motor vehicles:
– registered in decedent’s name;
– used by decedent or family members; and
– weighing no more than 15,000 pounds.
(c) Some tuition programs, including the Florida Prepaid College Trust Fund.
(e) Certain death benefits paid to teachers and school administrators.
Liens on exempt property are still in place even though the property is exempt from other creditor claims. So, for example, the mortgage on a property must still be paid even after it has been transferred to a beneficiary.
Property bequeathed in a Will may not be considered exempt unless the beneficiary would have received the property anyway as an intestate heir. Heirs may have to ask the probate court for a ruling on the status of some bequests.
As always, there are exceptions and limitations regarding property that may be exempt. Take the opportunity to discuss property exemptions with your Palm City estate planning lawyer.