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Exempt Property Under the Florida Probate Code: 2009 Amendments to F.S. §732.402 and Statutory Exemptions

Elder Law

In Florida, there is constitutional exempt property and statutory exempt property under the Florida Probate Code. Both exemptions provide protection from creditors’ claims. One of the more coveted exemptions is the homestead exemption found in Fla. Const. art. X, §4. The constitution also exempts up to $1,000 of personal property.1 These exemptions inure to the surviving spouse or heirs of the owner.2 The Florida Probate Code supplements the constitutional exemptions by statutorily including additional assets as exempt from the claims of creditors.3 & #x201c;This statute is intended to protect the surviving spouse and children by preserving a portion of the decedent’s estate against the claims of unsecured creditors.”4 Specifically, F.S. §732.402 provides that “[i]f a decedent was domiciled in this state at the time of death, the surviving spouse, or, if there is no surviving spouse, the children of the decedent shall have the right to a share of the estate of the decedent…being designated ‘exempt property.’”

During the 2009 Florida Legislative Session, CS/HB 599 was passed and signed into law by Governor Charlie Crist, amending F.S. §732.402. The amendments revise criteria for certain household items, motor vehicles, and tuition programs as exempt.5 The act’s effective date was July 1, 2009.6

The household furnishing exemption was doubled. As amended, statutory exempt property shall consist of 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.7 Just because the household furnishings are found on the date of death at the decedent’s usual place of abode does not bring them into the estate. “Section 732.402 is not intended to, and does not, deprive the surviving family members or third parties of their existing rights to personal property within the decedent’s home at the time of the decedent’s death.”8 However, the personal representative may maintain an action of replevin to recover possession of estate property not voluntarily surrendered upon demand or to determine title to the property.9

The automobile exemption is now limited to “two motor vehicles as defined in s.316.003(21), 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.”10

The new statute replaced “automobiles” with “motor vehicle.” F.S. §316.003(21) defines “motor vehicle” as “[a]ny self-propelled vehicle not operated upon rails or guideway, but not including any bicycle, motorized scooter, electric personal assistive mobility device, or moped.” Although the legislature included the statutory definition of “motor vehicle” in the amended act, the limitation of the type of vehicle recognized as exempt is codification of existing case law.11 In In re: Estate of Hazel Cooper Corbin, 603 So. 2d 127 (Fla. 1st DCA 1992), the district court affirmed the trial court’s refusal to recognize the decedent’s motor home and travel trailer as exempt automobiles under F.S. §732.402(2)(b). The district court relied on the specific statutory language “of subsection (2)(b) exempting those automobiles held in the decedent’s name ‘ and regularly used by the decedent or members of the decedent’s immediate family as their personal automobiles. ’”12 The court did recognize that a motor home or travel trailer could conceivably be used as one’s personal vehicle; however, it was not demonstrated on the record before the court.13 The amendments to F.S. §732.402(2)(b) reduce the number of exempt motor vehicles from “all” to “two” and limit the type of motor vehicle subject to exemption as defined in F.S. §316.003(21).

Under the 2009 act, the exemption of prepaid college board programs was expanded. Prior to CS/HB 599, the statutory exemption was limited to the “Stanley G. Tate Florida Prepaid College Program contracts purchased and Florida College Savings agreements established under part IV of chapter 1009.”14 CS/HB 599 expanded the exemption to “[a]ll qualified tuition programs authorized by s. 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 s. 1009.98 and the Florida Prepaid College Trust Fund participation agreements under s. 1009.981.”15

F.S. §732.402 also contains a “catch all” exemption provision that is often overlooked. Under F.S. §732.402(4), “[e]xempt property shall be in addition to protected homestead, statutory exemptions, and property passing under the decedent’s will or by intestate succession.” The “statutory exemptions” portion of the act brings all other statutorily exempt property under the umbrella of F.S. §732.402. For instance, under the Florida Workers’ Compensation Act, specifically F.S. §440.22:

No assignment, release, or commutation of compensation or benefits due or payable under this chapter except as provided by this chapter shall be valid, and such compensation and benefits shall be exempt from all claims of creditors, and from levy, execution and attachments or other remedy for recovery or collection of a debt, which exemption may not be waived. However, the exemption of workers’ compensation claims from creditors does not extend to claims based on an award of child support or alimony (emphasis added).

The exemptions from claims of creditors to funds identified as workers’ compensation benefits remain exempt in the hand of the beneficiary.16 “[T]he exemption in section 440.22 applies to workers’ compensation benefits received by the beneficiary and deposited in a bank account, so long as the funds are traceable to the workers’ compensation benefits.”17

Additional statutory exemptions include wages from garnishment;18 life insurance policies;19 cash surrender value of life insurance policies and annuity contracts;20 wages or unemployment compensation;21 disability income benefits;22 pension money and certain tax-exempt funds;23 assets in qualified tuition programs, medical savings account, Coverdell education saving account, and hurricane savings account;24 “a debtor’s interest in personal property, not to exceed $4,000.00, if the debtor does not claim or receive the benefits of homestead exemption under s. 4, [a]rt. X, of the State Constitution.”25 However, many exemptions do not extend to debt owed for child support or spousal support.26

[P]ersons who may be entitled to exempt property under s. 732.402 will be deemed to have waived their rights to claim that property as exempt property unless a petition for determination of exempt property is filed by such persons or on their behalf on or before the later of the date that is 4 months after the date of service of a copy of the notice of administration on such persons or the 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 the exempt property.”27

The order determining exempt property authorizes the personal representative to release the property to the proper person.

Property specifically or demonstratively devised by the decedent’s will to any devisee shall not be included in exempt property. However, person to whom property has been specifically or demonstratively devised and who would otherwise be entitled to it as exempt property… may have the court determine the property to be exempt from claims, except for perfected security interest thereon, after complying with the provision of subsection (6) [requiring petitioning for determination of exempt property].28

A bequest of “all my clothing, jewelry, household goods, personal effects, automobile and all other tangible personal property not otherwise specifically devised herein or pursuant to the written statement or list…” to decedent’s son was a specific devise by decedent removing the property from spouse’s claim of exempt property.29 Notwithstanding a specific devise, it would be prudent to file a petition for determination of exempt property and obtain an order authorizing the personal representative to release the property to the proper person.

Changes made to F.S. §732.402 took effect July 1, 2009. The changes increased the exemption amount of household furniture, furnishings, and appliances in the decedent’s usual place of abode up to a net value of $20,000, limited the number of motor vehicles that may be determined exempt to two, codified the case law definition of “motor vehicle” that may be determined exempt property in probate proceedings, and expanded prepaid college board programs. There are additional statutory entitlements for determining other assets exempt from creditors’ claims and preserving them for the surviving spouse and decedent’s children. The personal representative or person claiming entitlement to the exempt property should always file a petition to determine exempt property within the statutory time period and secure an order authorizing the personal representative to release the property to the proper person.

1 Fla. Const. art. X, §4.

2 Fla. Const. art. X, §4(a)(2).

3 Fla. Stat. §732.402.

4 In re: Estate of Grant, 558 So. 2d 208, 209 (Fla. 2d D.C.A. 1990), citing Fla. Stat. §732.402(6) (1987).

5 CS/HB 599 (2009).

6 Id.

7 Fla. Stat. §732.402(2)(a) (2009).

8 In re: Estate of Grant, 558 So. 2d 208, 209 (Fla. 2d D.C.A. 1990), citing Fla. Stat. §732.402(6) (1987).

9 Id.

10 Fla. Stat. §732.402(2)(b) (2009).

11 In re: Estate of Hazel Copper Corbin, 603 So. 2d 127 (Fla. 1st D.C.A. 1992).

12 Id. at 128 (emphasis added).

13 Id. at 129.

14 Fla. Stat. §732.402(2)(c) (2008).

15 Fla. Stat. §732.402(2)(c) (2009).

16 Broward v. Jacksonville Medical Center, 690 So. 2d 589 (Fla. 1997).

17 Id. at 592.

18 Fla. Stat. §222.11.

19 Fla. Stat. §222.13.

20 Fla. Stat. §222.14.

21 Fla. Stat. §222.15.

22 Fla. Stat. §222.18.

23 Fla. Stat. §222.21.

24 Fla. Stat. §222.22.

25 Fla. Stat. §222.25.

26 Id.

27 Fla. Stat. §733.212(2)(d).

28 Fla. Stat. §732.402(5).

29 Babcock v. Estate of Bradford L. Babcock, et al., 995 So. 2d 1044.

Alex Cuello is the principal shareholder at the Law Office of Alex Cuello, P.A. He practices in the area of probate and guardianship administration and litigation as well as Medicaid planning and Social Security disability. Mr. Cuello received his J.D. from St. Thomas University College of Law and LL.M. in elder law from Stetson University College of Law.

This column is submitted on behalf of the Elder Law Section, Babette B. Bach, chair.

Elder Law