If your primary home had protected equity under the homestead exemption, you need to make sure you protect any proceeds you acquire from the sale or refinancing of your home. The amount your home is protected varies from state to state, however, once your finances are not invested in an exempt asset, they will quickly become vulnerable.
Most homestead law states protect the proceeds from the sale or refinancing of an exempt asset either for a specified time (set by statute), or for a reasonable time (determined by the courts). Before this time expires it would be best to implement an Asset Protection Plan.
Some examples of how you could protect your proceeds would be:
- Use the proceeds from the sale or refinancing to buy another exempt asset. For example, you might use the protected proceeds from selling your homesteaded home to buy an exempt annuity or life insurance. You must inquire with your specific state to find out what assets are exempt. State specific list of exemptions link
- Put the proceeds in a protective entity, such as a limited partnership, LLC or irrevocable trust. Depending on which option you choose you will have different levels of protection and control.
If you do not opt to move your money into a protective structure or exempt asset you must segregate the exempt proceeds in separate accounts so it can be identified as proceeds from an exempt asset. This will maintain continued protection of these proceeds.
For specific questions about which assets are exempt in your state or how you can better protect your existing/future proceeds please contact us to schedule a complimentary consultation.
The Presser Law Firm, P.A.
6199 N. Federal Highway, Boca Raton FL 33487
(561) 953-1050 or e-mail Info@AssetProtectionAttorneys.com