What Is “Exempt Property,” and How Does It Affect My Florida Estate Planning?
There are a number of unusual legal terms you may come across when preparing your Florida estate plan. One of them is “exempt property.” This term appears in a specific Florida statute that is part of the state’s overall laws governing individual estates. So what does it mean? And is it something you need to think about when making a will or trust?
Understanding Exempt Property
When you die, your debts do not necessarily pass on with you. Your creditors may demand repayment of your debts from the assets in your estate. In order to ensure such demands do not leave your immediate family with nothing, however, Florida law exempts certain property from most creditor claims. This is what is known as “exempt property.”
Exempt property protections only cover your spouse–if you were married at the time of your death–otherwise they pass on to any children who outlived you. By law, your spouse or children may claim the following types and amounts of property under the legal exemption:
- Up to $20,000 worth of “furniture, furnishings, and appliances” in your primary residence.
- 1 or 2 motor vehicles, provided neither weighs more than 15,000 pounds, and they are used by your “immediate family as their personal motor vehicles.”
- Any money you placed in a Florida 529 Savings Plan.
- If you are a public school teacher or administrator, any death benefit your family is paid if you are killed as the “result of an unlawful and intentional act.”
You’ll notice there are a lot of items omitted from the definition of exempt property. For example, it does not protect your jewelry. Nor does it cover your home or other real estate, although Florida law contains additional protections for your primary residence (or “homestead”).
You should also know that exempt property does not protect any property subject to a “perfected security interest.” In plain English, if you used any of the exempt property described above as collateral, the lender may still be able to seize that item from your estate. So if you had an outstanding car loan one of your vehicles, your spouse cannot rely on the exempt property rule to prevent the lender from repossessing the vehicle.
Exempt Property and Your Will
Now you may be wondering, “Does the exempt property rule override my will?” For example, say you own a car that meets the exempt property requirements. Do you have to leave it to your spouse, or can you give it to your brother instead? The simple answer is that any property you specifically dispose of in your will is not subject to the exempt property rule. So if your will includes a clause that says, “I leave my 2010 Honda accord to my brother,” your spouse or children cannot use the exempt property rule to override your gift.
Of course, that is only a hypothetical example. If you need more specific advice tailored to your own situation, you need to speak with a qualified Fort Myers estate planning attorney. Call the Kuhn Law Firm, P.A., at 239-333-4529 to schedule a free consultation with a member of our legal team today.