Florida Exemptions and How the Same May Be Lost
Asset protection is a bustling industry in Florida, and constitutionally protected under Fla. Const. art. I, §2.[1] Transferring assets into the Florida homestead or Ch. 222’s statutorily protected assets is often done before and after creditor attack. Knowledge about how the Florida exemptions, combined with federal or bankruptcy statutes, which may trump the same, is important. This article reviews the basic exemptions provided under Florida and federal law, and then explores circumstances in which the exemption may become lost or affected.
Constitutional Exemptions
The Florida exemption scheme is layered: 1) constitutional; 2) statutory; 3) hybrid constitutional/statutory; and 4) common law. Constitutional exemptions hold more value and are more impervious to creditor attack. They are described in Fla. Const. art X, §4 (see Figure 1).
Statutory Exemptions
Statutory exemptions have grown by legislation. Figure 2 lists the most common statutory exemptions.
The Life Insurance Hybrid
Although life insurance is a statutory exemption, it uniquely holds a status nearly equal to the constitutional exemptions of Fla. Const. art. X, §4. One ruling reviewed the Fla. Const. art. X, §4, protection being derived from the 1885 revisions to the Florida Constitution. Prior to 1885, there was an 1868 Florida Constitution that provided:
[T]hat the proceeds of life insurance shall not be liable to any legal process in favor of any creditor of the insured unless the insurance policy declares that the policy was effected for the benefit of such creditor, was apparently not regarded as being violative of the exemption article of the Constitution of 1868, even though such proceeds exceed in amount the organic exemptions.[2]
In effect, life insurance has been interpreted to be an 1868 constitutional exemption, which is less protected than 1885 constitutional exemptions, but more protected than the statutory exemptions, most particularly those listed in F.S. Ch. 222.[3]
Common Law Exemptions
Florida offers the common law exemption of tenancy by the entireties.
Property held as a tenancy by the entireties possesses six characteristics: (1) unity of possession (joint ownership and control); (2) unity of interest (the interests in the account must be identical); (3) unity of title (the interests must have originated in the same instrument); (4) unity of time (the interests must have commenced simultaneously); (5) survivorship; and (6) unity of marriage (the parties must be married at the time the property became titled in their joint names).[4]
If property is held as tenants by the entireties, that property is exempt as to a creditor of one of the two tenants, but is not exempt as to a creditor of both tenants.[5]
Some Federally Created Exemptions
In addition to the Florida Constitution, Florida statutes and common law, there are federal exemptions. Figure 3 lists some of the most common federal exemptions.
Are State Statutory Exemptions (Other Than Life Insurance) Allowable?
Absent an enabling clause, a statute enacted by the state legislature may not restrict a fundamental right granted under the Florida Constitution.[6] The Florida Constitution occasionally uses enabling clauses — commonly created by the terms “appropriate legislation” in the constitutional provision.[7] Most importantly, the Florida Constitution does not include an enabling clause in Fla. Const. art. X, §4. Moreover, “[s]tate constitutions are limitations upon the power of state legislature[s]….”[8] As a result, “‘To the extent a statute conflicts with express or clearly implied mandate[s] of the Constitution, the statute must fail.’ Id. at 142. Not surprisingly, courts rely on this principle and conclude that legislative authority necessarily yields to constitutional pronouncements.”[9] Because of such omission, the statutory exemptions that address “exemptions” specifically listed in Fla. Const. art. X, §4,[10] may be ruled unconstitutional. The exemption provisions of F.S. Ch. 222, however, may be deemed “enabling legislation” because “[s]tatutes are presumed to be constitutional and courts must construe them in harmony with the constitution if it is reasonable to do so.”[11] This issue has not been addressed by Florida courts.
Recharacterization
Sometimes, an asset may be one thing, but receive the exemption character from another. Examples include insurance proceeds paid on a loss of the homestead may be protected as homestead;[12] proceeds from sale of homestead that are held in an earmarked account may also be protected as homestead; wages in a bank account may continue to be exempt as wages for a period of months; and Social Security benefits deposited into a bank account may continue to be protected Social Security benefits.[13] Importantly, if these above-described funds are to inherit the exemption, the funds must not be commingled with other funds.[14]
Waiver
Creditor-drafted documents frequently provide for waiver of exemptions. As to constitutionally exempt assets, this practice is not well received by Florida courts. “[N]o policy of this [s]tate is more strongly expressed in the constitution, laws and decisions of this [s]tate than the policy of our exemption laws.”[15] Florida homesteads are “sacred cows” that cannot have their exemption waived.[16] The Florida Supreme Court acknowledged there is permissible waiver of “other” constitutional rights, but limited a debtor’s waiver of the homestead protection to secured debt (mortgages or mechanics liens).[17] Regardless of this, the Florida Legislature has allowed a spouse to waive his or her probate homestead rights, as well as other rights to the home, by written agreement.[18]
Waiver of statutory exemptions may, on the other hand, be permitted. The “head of household wages” statute specifically provides for the waiver of the exemptions and even provides a form for the same.[19] Other waivers are enforceable by caselaw: life insurance[20] or annuity.[21] Some benefits that may not be waived include workers’ compensation benefits[22] or Longshore and Harbor Workers’ compensation claims.[23]
Overprotecting the Exemptions: How to Lose Homestead
If one is a resident in Florida, and one’s real property is where the Floridian sleeps at night, the home would very likely be shielded from creditor attack by the homestead exemption.[24] But, there are three ways to lose the homestead protection.
Florida caselaw clearly establishes that limited liability companies cannot have a homestead protection under Fla. Const. art. X, §4.[25] Hard money lenders often do not wish to comply with various consumer protective acts that are tricky and time-consuming or paper-consuming.[26] To avoid consumer laws, lenders may demand that title be transferred to a limited liability company. In the end, the home lender has delivered cash to the homeowners at the expense of the homestead protection. If the shell company (the limited liability company that now has title) encounters a creditor in the future, the home may be sold. Alternatively, the limited liability company, as an asset of the residents, may be executable after judgment is reached against the members.[27]
Another event that may end homestead protection is when the homestead is sold. The proceeds of the sale may be protected.[28] However, inappropriate use of the proceeds may end the protective character of the same. Preservation of the exemption after the funds requires a bona fide intent to reinvest the sales proceeds into another homestead.[29] Additionally, the reinvestment must occur within a reasonable time. Lastly, the funds cannot be used for purposes other than reinvesting in a homestead.[30]
Homestead exemption may also be lost by abandonment of the residence.[31] Abandonment is a question of fact, ultimately focusing on the “intent” of the party.[32] Furthermore, the abandonment must be voluntary — a court order directing an estranged spouse to leave the home will not meet the requisite intent of abandonment to lose the homestead protections.[33]
F.S. §222, Fraudulent Transfer Provisions
Chapter 222, which creates most of Florida’s statutory exemptions, has a few clauses that allow creditors to deprive debtors of exemptions. The first is F.S. §222.29, which reads: “An exemption from attachment, garnishment, or legal process provided by this chapter is not effective if it results from a fraudulent transfer or conveyance as provided in chapter 726.”
The reference to F.S. Ch. 726 is to Florida’s incorporation of the Uniform Fraudulent Transfer Act. Chapter 726, which provides that a transfer to a party, with either intent to defraud or without value, is an avoidable transfer; and, a creditor or other interested party may file a lawsuit to avoid the transfer and recover the transferred property that otherwise would be deemed exempt. In addition, F.S. §222.30 outlines the concepts of fraudulent transfer or conversions[34] and annuls an asset’s exemption if a fraudulent transfer delivered the asset to exempt status.
Losing Tenancy by the Entireties
A tenancy by the entireties can terminate in a variety of other ways. The instrument creating the estate may have granted an interest limited in time; thus, when the title passes, the entireties estate ceases to exist.[35] One spouse can transfer his or her interest to the other spouse so that the donee spouse holds the property in fee simple.[36] The spouses can reconvey the property to themselves as tenants in common.[37] The death of a spouse destroys the entirety and the surviving spouse becomes the owner in fee simple.[38] Dissolution of marriage ends the marital unity and the ex-spouses become tenants in common.[39] Finally, should one spouse murder the other, the surviving spouse becomes a tenant in common with the deceased spouse’s heirs.[40]
Tenancy by the entirety can also be lost when estate planning adjusts the ownership of the asset from a married couple into a trust. A trust, unlike a couple, cannot hold all six elements required to be exempt as tenancy by the entirety property.[41] In turn, the transfer of an asset into a trust may avoid expensive probate, but could be extremely costly if subjected to a creditor’s or bankruptcy trustee’s attack.[42]
Supremacy Clause Issues: Bankruptcy Over State Protections
Delivering a debtor to bankruptcy means delivering the debtor to more creditor laws. Bankruptcy law, derived from the Bankruptcy Code that is U.S. Code title 11 is federal law. The Supremacy Clause,[43] under the U.S. Constitution, demands that the bankruptcy (federal) law prevail over state law.[44] From this concept, the Bankruptcy Code provides opportunity to attack Florida’s “sacred cow”: the constitutionally protected homestead that would not be subject to attack outside of bankruptcy.
Bankruptcy Permits Attack of Florida Homestead
In 2005, Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) that revised the U.S. Bankruptcy Code for cases filed on or after October 17, 2005. Prior to BAPCPA, Florida had published cases that permitted out-of-state debtors to prevail over creditors by investing in a big Florida home. After being subjected to judgments, cashing out, running to Florida with a suitcase of money, and buying a large home with that cash, the debtors effectively immunized their cash with the Florida homestead.[45] In these cases, the debtor may lose the bankruptcy discharge (fraudulent transfer), but got to keep the home. And, the Florida Supreme Court in Havoco of America Ltd. v. Hill, 790 So. 2d 1018 (Fla. 2001), ruled that the homestead protections are inviolate.
BAPCPA responded with 11 U.S.C. §522(o)(4), which reads:
(o) For purposes of subsection (b)(3)(A), and notwithstanding subsection (a), the value of an interest in—.. .
(4) real or personal property that the debtor or a dependent of the debtor claims as a homestead;
shall be reduced to the extent that such value is attributable to any portion of any property that the debtor disposed of in the 10-year period ending on the date of the filing of the petition with the intent to hinder, delay, or defraud a creditor and that the debtor could not exempt, or that portion that the debtor could not exempt, under subsection (b), if on such date the debtor had held the property so disposed of.
Ultimately, 11 U.S.C. §522(o)(4) was in conflict with the Havoco “sacred cow” inviolate protection for the homestead. When confronted with this issue, one court ruled, “by virtue of the Supremacy Clause, 11 U.S.C. §522(o) preempts Florida’s constitutional homestead exemption.”[46] The Florida homestead exemption suffered a significant loss to creditor attack in a federal court because of the Supremacy Clause.
The Former Spouse
BAPCPA also created a broad definition of what is now termed “Domestic Support Obligation” (DSO). A DSO is basically any order entered by a domestic court in the appropriate jurisdiction of matters concerning matrimonial or parental responsibilities or divisions.[47] BAPCPA also provides that exempt property will not be liquidated during or after the bankruptcy case to pay creditors unless that exempt property is a debtor’s shielding of its assets from paying a DSO award.[48] Only in bankruptcy can a DSO creditor, not the trustee or other creditors, assert claims against the exempt property.[49] Under 11 U.S.C. §522(c)(1), the Florida homestead is not exempt as to the DSO creditor as provided by the Bankruptcy Code.[50] Because the homestead is included in the “exempt property” definition of 11 U.S.C. §522(c), a DSO creditor may liquidate the “sacred cow” homestead — something that could not be done outside of bankruptcy.[51]
Loss of Exemptions Through Forfeiture Law and Tax Lien Law
State constitutional provisions cannot obstruct the uniform national enforcement of federal criminal statutes or federal forfeiture laws intended to have uniform application throughout the nation.[52] Therefore, “[t]he state exemption from forfeiture based on the Florida homestead law is preempted in a forfeiture action brought under 18 U.S.C. §1955(d).”[53] But entireties property is exempt from forfeiture.[54] To add to the confusion, the Supreme Court, when interpreting 26 U.S.C. §6321, which allows a federal tax lien to attach “upon all property and rights to property, whether real or personal, belonging to a federal tax debtor,” determined that a federal tax lien may attach to a taxpayer-debtor’s interest in property held as a tenancy by the entirety when that interest “constitute[s] ‘property’ or ‘rights to property’” under the applicable state law.[55] Essentially, forfeitures can attach to homesteads, but cannot attach to innocent-spouse-owned, tenancy-by-the-entireties property; while, tax liens can attach to homestead properties[56] and can attach to tenancy-by-the-entireties properties.
Conclusion
The laws and rulings referenced above should lead the reader to one simple conclusion: Exemption law, in the state of Florida, as generous as it may be, can become a web of confusion with truncated or hidden interpretations even experienced practitioners may not understand. Certain maxims, with noted exceptions, do exist. Florida constitutional exemptions are strongly protected by the courts. Fraudulently transferring assets into the Florida constitutionally protected homestead often will not subject the homestead to judicial sale. Nevertheless, the Florida homestead exemption can be lost by transferring title to a limited liability company or by abandonment. The Florida constitutional homestead exemption can also succumb to federal law (e.g., if there is a DSO creditor) or a fraudulent conversion within 10 years of filing bankruptcy.[57] Life insurance, although a statutory exemption under Chapter 222, has Florida Supreme Court precedent that adjudicated it to be a Florida constitutional exemption, thereby giving the life insurance exemption greater protections than the other exemptions listed in Ch. 222. The other statutory exemptions of Ch. 222 can be attacked by creditors if obtained through fraud, whether actual or constructive. Furthermore, waiver of statutory exemptions will be enforced against debtors, with few exceptions. Common law exemptions, most particularly tenancy by the entirety, are effective so long as the marriage continues. But, tenancy by the entirety exemption can be lost by act or if transferred into a trust, which transfer would annul the tenancy by entirety and, in turn, make the asset nonexempt. Lastly, commingling exempt cash proceeds or deposits with nonexempt deposits will inevitably lead to creditor attack. Keeping bank accounts that have an exclusive source of deposits derived from the “exemption” (e.g., homestead sale proceeds, Social Security, wages) would be prudent and very advisable.
[1] Fla. Const. art. I, §2 (emphasis added) (“Basic rights. — All natural persons, female and male alike, are equal before the law and have inalienable rights, among which are the right to enjoy and defend life and liberty, to pursue happiness, to be rewarded for industry, and to acquire, possess and protect property. No person shall be deprived of any right because of race, religion, national origin, or physical disability.”).
[2] Milan v. Davis, 97 Fla. 916, 977-78 (1929).
[3] Id. That court further wrote, “It was evidently not the intent of the Constitution of 1885 that the exemptions provided for therein should supersede or limit the amount of the then existing statutory exemption of the proceeds of life insurance policies….” Id. at 978.
[4] Julia v. Russo, 33 Fla. L. Weekly D1193 (Fla. 4th DCA 2008), citing Beal Bank, SSB v. Almand and Associates, 780 So. 2d 45, 52 (Fla. 2001).
[5] “[F]unds owned by a husband and wife as tenants by the entireties are ‘beyond the reach of a creditor of either one of the tenants. Such funds are immune from garnishment except where the debt was incurred by both spouses.’” Branch Banking & Tr. Co. v. Ark Dev./Oceanview, LLC, 150 So. 3d 817, 821 (Fla. 4th DCA 2014) (quoting Antuna v. Dawson, 459 So. 2d 1114, 1116-17 (Fla. 4th DCA 1984)).
[6] Fla. Dep’t of Agric. & Consumer Servs. v. Dolliver, 283 So. 3d 953, 959 (Fla. 2d DCA 2019).
[7] “The legislature shall have the power to enforce this section by appropriate legislation,” exists in Fla. Const. art. II, §9(b); “The legislature may enact legislation to implement this subsection….” Fla. Const. art. V, §13 (judiciary ethics); “[T]he legislature shall adopt legislation to implement this section and any amendment to this section in a manner consistent with its broad purpose and stated terms, and having an effective date no later than July 1 of the year following voter approval.” Fla. Const. art. X, §20 (smoke free workplaces); “[T]he legislature shall adopt legislation implementing this section and having an effective date no later than July 1 of the year following voter approval of this amendment.” Fla. Const. art. X, §23 (slot machines); “Nothing in this section shall limit the legislature from enacting laws consistent with this section.” Fla. Const. art. X, §29 (medical marijuana); and “[T]he legislature shall enact implementing legislation establishing penalties for violations of the prohibition against abuse of public position to take effect December 31, 2020.” Fla. Const. art. X, §38 (lobbying).
[8] Notami Hospital of Florida, Inc. v. Bowen, 927 So. 2d 139, 142 (Fla. 1st DCA 2006).
[9] Fla. Dep’t of Agric. & Consumer Servs. v. Dolliver, 283 So. 3d 953, 959 (Fla. 2d DCA 2019), citing Notami Hospital of Florida, Inc. v. Bowen, 927 So. 2d 139, 142 (Fla. 1st DCA 2006). Note: the “hybrid” exemption for life insurance may be immune from such an attack.
[10] For instance, does Fla. Stat. §222.01 address Fla. Const. art. X, §4?
[11] Fla. Dep’t of Educ. v. Glasser, 622 So. 2d 944, 946 (Fla. 1993), citing Holley v. Adams, 238 So. 2d 401, 404 (Fla. 1970).
[12] “[I]nsurance proceeds had the same protections as the damaged homestead property and were, thus, exempt from the claims of creditors pursuant to [art.] X, [§]4(a) of the Florida Constitution.” Speed Dry, Inc. v. Anchor Prop. & Cas. Ins. Co., 45 Fla. L. Weekly D1999 (Fla. 5th DCA 2020), citing Quiroga v. Citizens Property Insurance, 34 So. 3d 101, 103 (Fla. 3d DCA 2010).
[13] “[T]his court is committed, we hold the proceeds of a voluntary sale of a homestead to be exempt from the claims of creditors just as the homestead itself is exempt if, and only if, the vendor shows, by a preponderance of the evidence an abiding good faith intention prior to and at the time of the sale of the homestead to reinvest the proceeds thereof in another homestead within a reasonable time.” Orange Brevard Plumbing & Heating Co. v. La Croix, 137 So. 2d 201, 206 (Fla. 1962).
[14] Orange Brevard Plumbing & Heating Co. v. La Croix, 137 So. 2d 201, 206 (Fla. 1962).
[15] Sherbill v. Miller Mfg. Co., 89 So. 2d 28, 31 (Fla. 1956).
[16] “In Florida, homesteads are ‘sacred cows’; they may not be alienated contrary to the interests of those to be protected by the homestead character of the property involved.” Daniels v. Katz, 237 So. 2d 58, 60 (Fla. 3d DCA 1970).
[17] “Our ultimate concern in Carter was that a waiver of the exemption from forced sale in an unsecured agreement would ‘by the mere scratch of a pen’ render the exemption ‘nugatory.’ 20 Fla. at 570. The passage of time has not changed that concern. We therefore apply the doctrine of stare decisis and reaffirm our holdings in Carter and Sherbill.” Chames v. DeMayo, 972 So. 2d 850, 862 (Fla. 2007).
[18] Fla. Stat. §732.702 (2001), “Waiver of spousal rights.”
[19] Fla. Stat. §222.11(2)(b) (2011).
[20] “The owner of an insurance policy may waive the section 222.13 exemption merely by designating the insured or one or more of the insured’s creditors as a beneficiary or beneficiaries, by naming the insured’s estate as a beneficiary of the policy or, as here, by naming as beneficiary a trust whose terms direct distribution of the trust assets to the personal representative, if requested.” Morey v. Everbank, 93 So. 3d 482, 487 (Fla. 1st DCA 2012).
[21] “However, Mr. Rash, ‘with the advice of independent counsel,’ voluntarily and expressly waived his right to claim the exemption and does not now raise the defense on appeal.” State Farm Life Ins. Co. v. Fla. Asset Fin. Corp., 786 So. 2d 1, 3 (Fla. 4th DCA 2000).
[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 attachment or other remedy for recovery or collection of a debt, which exemption may not be waived.” Fla. Stat. §440.22 (2001).
[23] 33 U.S.C. §916 (1927).
[24] Florida uniquely does not require title be in the name of the debtor seeking homestead protection. A life estate interest is sufficient beneficial interest in property to qualify for homestead exemption. Morgan v. Bailey, 90 Fla. 47, 105 So. 143 (Fla. 1925); Hill v. First Nat’l Bank, 73 Fla. 1092, 75 So. 614 (Fla. 1917).
[25] Pasternack v. Klein, No. 8:16-cv-482-T-33CPT, 2019 U.S. Dist. LEXIS 11999, at *18 (M.D. Fla. 2019). “Under Florida law, homestead status is only afforded to properties owned by a ‘natural person.’ Fla. Const. art. 10, §4. The property at issue is owned by the Noah Group, a limited liability corporation. Thus, the affirmative defense is inapplicable.” Centennial Bank v. Noah Grp., Ltd. Liab. Co., 755 F. Supp. 2d 1256, 1260 (S.D. Fla. 2010).
[26] Fair and Accurate Credit Transactions Act, Gramm-Leach-Bliley Act, Right to Financial Privacy Act Equal Credit Opportunity Act, Fair Housing Act, Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act (RESPA), and Truth-In-Lending Act (TILA).
[27] Fla. Stat. §605.0503, “Charging order. — (1) On application to a court of competent jurisdiction by a judgment creditor of a member or a transferee, the court may enter a charging order against the transferable interest of the member or transferee for payment of the unsatisfied amount of the judgment with interest. Except as provided in subsection (5), a charging order constitutes a lien upon a judgment debtor’s transferable interest and requires the limited liability company to pay over to the judgment creditor a distribution that would otherwise be paid to the judgment debtor….(4) In the case of a limited liability company that has only one member, if a judgment creditor of a member or member’s transferee establishes to the satisfaction of a court of competent jurisdiction that distributions under a charging order will not satisfy the judgment within a reasonable time, a charging order is not the sole and exclusive remedy by which the judgment creditor may satisfy the judgment against a judgment debtor who is the sole member of a limited liability company or the transferee of the sole member, and upon such showing, the court may order the sale of that interest in the limited liability company pursuant to a foreclosure sale. A judgment creditor may make a showing to the court that distributions under a charging order will not satisfy the judgment within a reasonable time at any time after the entry of the judgment and may do so at the same time that the judgment creditor applies for the entry of a charging order. (5) If a limited liability company has only one member and the court orders a foreclosure sale of a judgment debtor’s interest in the limited liability company or of a charging order lien against the sole member of the limited liability company pursuant to subsection (4).”
[28] Orange Brevard Plumbing & Heating Co. v. LaCroix, 137 So. 2d 201 (Fla. 1962).
[29] “The funds resulting from the voluntary sale of the homestead are ‘converted’, and while ‘in transit’ assume the character of the exempt real property, dependent, however, upon a bona fide intent of the seller to reinvest such funds in another homestead within a reasonable time.” Orange Brevard Plumbing & Heating Co. v. La Croix, 137 So. 2d 201, 207 (Fla. 1962).
[30] “The proceeds of the sale are not exempt if they are not reinvested in another homestead in a reasonable time or if they are held for the general purposes of the vendor.” Sun First Nat’l Bank v. Gieger, 402 So. 2d 428, 431 (Fla. 5th DCA 1981).
[31] “In order to show abandonment, ‘it must be shown that both the owner and the owner’s family abandoned the property.’” (citations omitted). Beltran v. Kalb, 63 So. 3d 783, 787 (Fla. 3d DCA 2011).
[32] “The issues of whether and when the permanent abandonment of a home, which is required to strip the property of its homestead character, has occurred are essentially matters of the intent of the record owner of the property.” McGann v. Halker, 530 So. 2d 440, 440 (Fla. 3d DCA 1988)
[33] “In the instant case, the [c]ourt finds that the [d]ebtor did not voluntarily abandon his homestead because the state court’s orders granted the [d]ebtor’s former wife the right to the exclusive use and possession of the Property until it is sold.” In re Luttge, 204 B.R. 259, 261 (Bankr. S.D. Fla. 1997).
[34] Fla. Stat. §222.30 (“Fraudulent asset conversions. — (1) As used in this section, “conversion” means every mode, direct or indirect, absolute or conditional, of changing or disposing of an asset, such that the products or proceeds of the asset become immune or exempt by law from claims of creditors of the debtor and the products or proceeds of the asset remain property of the debtor. The definitions of chapter 726 apply to this section unless the application of a definition would be unreasonable.”).
[35] Matthews v. McCain, 125 Fla. 840, 170 So. 323 (1936).
[36] Hunt v. Covington, 145 Fla. 706, 200 So. 76 (1941).
[37] Pace v. Woods, 177 So. 2d 779 (Fla. 3d DCA 1965).
[38] Wilson v. Florida Nat. Bank & Trust Co., 64 So. 2d 309, 312 (Fla. 1953); Knapp v. Fredricksen, 148 Fla. 311, 4 So. 2d 251, 252 (1941).
[39] Fla. Stat. §689.15 (1987).
[40] Hogan v. Martin, 52 So. 2d 806 (Fla. 1951); Ashwood v. Patterson, 49 So. 2d 848 (Fla. 1951); cf. Eichman v. Paton, 393 So. 2d 655 (Fla. 1st DCA 1981) (spouses in process of divorcing; husband attempts to kill wife but only renders her incompetent to do anything, including completing the divorce proceedings; court held that equity demanded that they be deemed tenants in common as if the divorce had been entered, even though all the unities were still present, so that husband could not gain from wife predeceasing him). This entire paragraph comes from footnote 2 in United States v. One Single Fam. Residence with Out Bldgs., 894 F.2d 1511, 1514 n.2 (11th Cir. 1990).
[41] “Because a trust is not a married individual, the trust cannot own the property as tenants by the entirety. The unity of marriage does not exist as to the trust.” In re Givans, No. 6:19-bk-01928-KSJ, 2020 Bankr. LEXIS 2624, at *10 (Bankr. M.D. Fla. 2020).
[42] It appears in Givans the property was not the homestead, and the Givans opinion is silent about the trust having an anti-alienation clause or what is commonly referred to as a spendthrift clause.
[43] The Supremacy Clause declares that the laws of the United States shall be the supreme law of the land; anything in the Constitution or laws of any state to the contrary notwithstanding. U.S. Const. art. VI, cl. 2.
[44] In re City of Stockton, 526 B.R. 35, 50 (Bankr. E.D. Cal. 2015) (“The Supremacy Clause operates to cause federal bankruptcy law to trump state laws, including state constitutional provisions, that are inconsistent with the exercise by Congress of its exclusive power to enact uniform bankruptcy laws. U.S. Const., art. VI, cl. 2.”).
[45] In re Popek, 188 B.R. 701 (Bankr. S.D. Fla. 1995), Bank Leumi Tr. Co. v. Lang, 898 F. Supp. 883 (S.D. Fla. 1995).
[46] In re Garcia, No. 09-33208-LMI, 2010 Bankr. LEXIS 2194, at *8 (Bankr. S.D. Fla. 2010).
[47] The Bankruptcy Code, 11 U.S.C. §101 (14A), defines DSO as follows: “The term ‘domestic support obligation’ means a debt that accrues before, on, or after the date of the order for relief in a case under this title, including interest that accrues on that debt as provided under applicable nonbankruptcy law notwithstanding any other provision of this title, that is — (A) owed to or recoverable by — (i) a spouse, former spouse, or child of the debtor or such child’s parent, legal guardian, or responsible relative; or (ii) a governmental unit; (B) in the nature of alimony, maintenance, or support (including assistance provided by a governmental unit) of such spouse, former spouse, or child of the debtor or such child’s parent, without regard to whether such debt is expressly so designated; (C) established or subject to establishment before, on, or after the date of the order for relief in a case under this title, by reason of applicable provisions of — (i) a separation agreement, divorce decree, or property settlement agreement; (ii) an order of a court of record; or (iii) a determination made in accordance with applicable nonbankruptcy law by a governmental unit; and (D) not assigned to a nongovernmental entity, unless that obligation is assigned voluntarily by the spouse, former spouse, child of the debtor, or such child’s parent, legal guardian, or responsible relative for the purpose of collecting the debt.”
[48] 11 U.S.C. §522(o)(4) referenced above.
[49] 11 U.S.C. §522(c)(1), which states, “a debt of a kind specified in paragraph (1) [tax] or (5) [DSO debt] of section 523(a)…shall be liable for a debt of a kind specified in such paragraph 5….”
[50] Judge Mark hints as such in Quezada when he wrote, “New §522(c) (1) creates a federal right entitling DSO creditors to execute against exempt assets even if those assets would be protected from execution under state law. Although, in theory, a state court judge is perfectly capable of applying federal law, in practical terms, it appears awkward for a DSO creditor to seek relief in state court to pursue assets which are exempt from execution under state law.” In re Quezada, 368 B.R. 44, 49 (Bankr. S.D. Fla. 2007).
[51] In re Quezada, 368 B.R. 44, 47 (Bankr. S.D. Fla. 2007) (“Therefore, under §522(c) (1), debts for DSOs may be enforced against exempt property, whether or not the underlying support obligation could be enforced against that property under applicable state law.”). But, the Quezada court would not allow the bankruptcy trustee to sell exempt property for the purpose of paying the DSO creditor. This latter proposition is followed by In re Waters, 2007 Bankr. LEXIS 2184, 2007 WL 1834901 (Bankr. N.D. Ala. 2007); In re Vandeventer, 368 B.R. 50 (Bankr. C.D. Ill. 2007); In re Ruppel, 368 B.R. 42 (Bankr. D. Or. 2007); and In re Covington, 368 B.R. 38 (Bankr. E.D. Cal. 2006).
[52] United States v. Rodgers, 461 U.S. 677 (1983).
[53] United States v. 18755 N. Bay Rd., 13 F.3d 1493, 1498 (11th Cir. 1994).
[54] United States v. One Single Fam. Residence with Out Bldgs., 894 F.2d 1511, 1512 (11th Cir. 1990) (“Because we see no way for the government to obtain a meaningful share in an entireties property without forfeiting some part of the innocent spouse’s interest, as long as the spouses remain married to each other and do nothing to terminate the entireties estate, we hold that none of the property can be forfeited to the United States.”).
[55] United States v. Craft, 535 U.S. 274, 122 S. Ct. 1414 (2002).
[56] State homestead exemptions do not protect property from the incidence of federal taxation. Korman v. I.R.S., 2007 U.S. Dist. LEXIS 91046, 2007 WL 1206742 (S.D. Fla. 2007), and U.S. v. Snyder, 149 U.S. 210 (1893) (holding that state law cannot interfere with federal tax law).
[57] 11 U.S.C. §522(o)(4).