Nearly all of my clients are interested in “asset protection” in some form or the other. In particular, they are concerned about protecting their home from creditors. Currently, the homestead exemption in California is $75,000 for single persons, $100,000 for married couples, and $175,000 for persons who are 65 years of age or older or that are physically or mentally disabled. Given the price of California real estate, this amounts to little protection at all.
Unfortunately, when I explain to clients that other states offer more favorable homestead exemption laws, the conversation usually comes to a grinding halt. Apparently, they are concerned about asset protection until they realize the work involved.
Still, it bears repeating that if one is truly concerned about protecting the equity in their home from judgment creditors, California is not the place for them. Instead, they should look to other states such as Florida.* Florida offers an unlimited homestead exemption for up to 160 contiguous acres of land located outside a municipality and one-half acre inside a municipality.
For those considering the move, they will need to take affirmative steps to establish domicile in Florida including but not limited to the following: filing a Florida Declaration of Domicile, filing an application for homestead exemption in Florida; registering to vote in Florida, obtaining a Florida driver’s license, transferring title to vehicles, executing new wills and trusts in Florida, etc.
As an additional bonus, Florida does not have state income tax. No wonder so many professional athletes and celebrities call South Beach home!
* In addition to California, Bob Lamm is licensed to practice law by The Florida Bar.