It should always be a priority for homeowners to protect their property from creditors. Of course, if you own a homestead in full, that property is yours and protected from creditors; but things get tricky when you sell a homestead and/or buy another.
Usually, homesteads are protected from creditors under the Florida Constitution. In the case JBK Associates v. Sill Bros Inc., the extent of protection under the Constitution becomes muddled. JBK obtained a $740,487.22 judgment against Patrick Sills in 2010. In October of 2013, Sills sold his homestead pursuant to a divorce decree – the proceeds were placed in an account, which was later divided into one cash account and two security accounts. Therefore, Patrick claimed, the accounts were homestead funds and should be protected. JBK appealed by arguing that Patrick lost his right to the homestead protection when he purchased securities with the homestead proceeds.
In Orange Brevard Plumbing & Heating Co. v. La Croix, The Supreme Court of Florida essentially ruled that in order for a homestead to be protected once an owner sells it, the owner must purchase a new homestead within a “reasonable amount of time.”
Each case is different; it would be wise to consult an expert to ensure that your homestead and assets are protected from creditors. Since the circumstances change with all kinds of variables, protect your homestead by purchasing a new homestead within a reasonable amount of time after selling one.