Law Offices of James W. Mallonee, P.A.
Port Charlotte 941-206-2223
Venice 941-207-2223
Helping individuals & families across Florida with their legal matters since 2005

Probate – Exempt Property From Creditorss

There has been a recent change in a statute to Florida’s Probate Code that is a significant boon to surviving spouses or children of a decedent. Section 732.402 of the Florida Statutes was amended in July of 2009 to assist families in avoiding creditor claims against a decedent’s property.

This article discusses those major changes and includes additional information regarding this seldom recognized probate statute. Section 732.402, of the Florida Statutes complements Florida’s Constitution Article X, Section 4, that protects a decedent’s homestead property from claims of creditors. The statute provides the following additional exemptions to Florida’s Constitution:

  • Household furniture, furnishings, and appliances in the decedent’s usual place of abode up to a net value of $20,000 as of the date of death. This exemption was doubled from its former exemption amount.
  • Two motor vehicles which do not, individually as to either such motor vehicle, have a gross vehicle weight in excess of 15,000 pounds, held in the decedent’s name and regularly used by the decedent or members of the decedent’s immediate family as their personal motor vehicles. Prior to being amended, this statute provided for all automobiles, however, the term “automobiles” was not defined and Florida’s Courts determined that automobiles did not include recreational vehicles or travel trailers which severely limited the use of the exemption to lesser costly transportation. The newly amended statute limits you to two vehicles of any kind except for any bicycle, motorized scooter, electric personal assistive mobility device, moped or vehicle the exceeds a gross weight of 15,000 pounds. As a result, regardless of the value of the vehicle it is exempt from non-secured creditors. Although the statute uses the term “vehicle” without defining it, collateral statutes define a vehicle as a device, in, upon, or by which any person or property is or may be transported or drawn upon a highway. This raises the question of whether a boat or yacht can be claimed as exempt property.
  • All qualified tuition programs authorized by §529 of the Internal Revenue Code of 1986, as amended, including, but not limited to, the Florida Prepaid College Trust Fund; advance payment contracts under §1009.98 Fla. Statutes; and, the Florida Prepaid College Trust Fund participation agreements under §1009.981 Fla. Statutes. The prior statute limited your exemption to the Stanley G. Tate Florida Prepaid College Program contracts purchased and Florida College Savings agreements established under Part IV of Chapter 1009, Fla. Statutes. This is a major change since it generally protects every college pre-paid plan from creditors in a probate action.

The above represents the significant changes to §732.402, Fla. Probate Code. The statute also includes your right to exemption of all other statutory exemptions (e.g. Chapter 222, Fla. Statutes) that would be available to the decedent or beneficiary including:

  • Garnishment;
  • Life Insurance Policies;
  • Annuities;
  • Unemployment Compensation;
  • Disability Income;
  • Pension Funds;
  • Medical Saving Accounts;
  • Workers Compensation Benefits;
  • Coverdell Education Savings Account, also known as an educational IRA;
  • Any Hurricane Savings Account (with certain limitations);
  • A debtor’s interest in personal property, not to exceed $4,000, if the debtor does not claim or receive the benefits of a homestead exemption under s. 4, Art. X of the State Constitution.

To be eligible to receive the above exemptions and protections, the decedent must have been domiciled in the State of Florida at the time of death. In addition, the request for such exemption must occur on or before the later of the date that is 4 months after the date of service of a Notice of Administration or a date that is 40 days after the date of termination of any proceeding involving the construction, admission to probate, or validity of the will or involving any other matter affecting any part of a decedent’s estate relevant to §732.402, Fla. Statutes.

Lastly, if any of a decedent’s property is determined to be exempt under §732.402, Fla. Statutes, such property shall be excluded from the value of a decedent’s estate “before” residuary, intestate, pretermitted or elective shares are determined. Why is this important? Because, it is possible that a given estate may have to be distributed by means of the intestate statutes due to children being born or marriage occurring after a Will is written; or, if a surviving spouse elects to take advantage of their right to an elective share of their spouse’s estate.

As you can see, there have been some major changes to the probate code that may affect your right to keeping more of your family’s estate than was previously available. If you have questions concerning exemptions to your estate proceeding, contact your attorney and have that discussion. It may be the best investment in time you make.

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