Placing Your Homestead into Your Revocable Living Trust
August 9, 2011 | Posted by admin I recently received an e-mail from an attorney friend regarding placing a client’s homestead property into his revocable living trust. As my friend had understood, some Florida estate planning attorneys hesitate to place homestead property into trust. Many of our clients have questions on this practice as well.
There are two types of homestead exemptions in Florida. The more commonly known is the tax exemption, which exempts a portion of your home from taxes and limits the amount the value can increase annually for tax purposes. The second type of homestead involves the Constitutional homestead, which exempts your homestead from your creditors, among other matters. Within these complex rules, placing homestead property into revocable trusts has raised a number of legal questions over the years.
Our general opinion is that it is safe to place your homestead property into your revocable living trust. Doing this does not create problems for tax purposes or for creditor exemption purposes. One reason some attorneys hesitate to do this is because a Florida bankruptcy court case (In re Bosonetto, 2001) ruled that homestead property placed into a trust lost its homestead status for creditor purposes. Since this case, there have been two bankruptcy court cases that have gone against the conclusion of this ruling. Thus, while some attorneys do not place homestead property into their clients’ trusts, it is our common practice. In doing so, we will help our clients avoid probate on their home and other property, thus saving the family time and money in attorney’s fees.
When you need help regarding your living trust or other estate planning issues, please do not hesitate to contact DeLoach + Hofstra, P.A.
Categories: Estate Planning and Probate Services, Estate Planning News | 
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Question: My name is Tom Elgin. I am the oldest son and P.O.A. for my mother Phyllis V. Elgin. We are both Florida residents and homeowners of 20+ years. I certainly understand the above on Revocable Trusts, and HOMESTEAD protection from Creditors, as my mother has one set up with her Condo inside it. However, she is NOW receiving benefits under the L.T.C Diversion program (aka Medicaid Waiver) administered by Neighborly Care Networks. I have heard DIFFERING views from Elder Care Attorneys in passing, as to whether MEDICAID could attach that property in a Revocable Trust (as a Creditor) after my mother’s death, where of course, they certainly could NOT attach it, as a pure Homestead (Not in a Trust, that is) after my mother passed. Though of course, the Condo would then have to go through Probate. Do you have any thoughts on which way is better to handle a Condo like this for Medicaid purposes? Revocable Trust or not? Do you know of ANY instances where Medicaid (in Florida) successfully challenged Homestead property inSIDE a Revocable Trust, as being NOT exempt Homestead under Florida’s Homestead guidelines. Thank you for responding when you have a moment. Tom Elgin, Cell: 813-892-4591 P.S.: telgin@tampabay.rr.com P.S.: I was the “talent” (actor) on your recent “Help for the Hurt”.com ad campagn, for what worth.