Florida Homestead Protection

Florida is by far the best state for homestead protection, but do you really know what that means? Article X, Section 4 and Article VII, Section 7 of the Florida Constitution specify the parameters of the homestead exemption for Florida residents. A Florida resident is any person who lives in the state of Florida for six (6) or more months out of the year. In other words, Florida must be your primary residence and not a transient residence.

Article X, Section 4 is broken down into three sections. The first section protects a person’s primary home from the threats of outside creditors. To be protected the homestead property must be on no more than one-half (1/2) acres of contiguous land inside of a municipality and no more than one hundred and sixty (160) acres of contiguous land outside of a municipality. The valuation of the property is immaterial as the entire value of the homestead is protected. The second section states that the benefits will inure or benefit any surviving spouses of a homestead resident; therefore, the benefits survive a person’s death. The third section focuses more on internal threats and states that the Florida homestead is not subject to devise if the owner is survived by a spouse or minor child except the homestead may be devised to the owner’s spouse if there are no minor child. However, the property may be sold, but only if the spouse joins in the sale. This section essentially protects the homestead property from the outside and from the inside (whether from an outside creditor or a creditor within one’s familial structure).

Finally, the last benefit of the homestead exemption in Florida is essentially a tax break, which is provided for pursuant to Article VII, Section 7 of the Florida Constitution.

Contact the Attorneys of The Noble Law Firm, P.A. to assist you with your estate planning and/or other legal needs.

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Major Concerns Physicians must Recognize regarding using Asset Protection Planning in Place of Medical Malpractice Insurance

With the rising costs of insurance, most doctors have probably considered the option of going “bare” and using asset protection instead of insurance in order to protect assets from lawsuits. Or, you may already have this strategy in place. Going “bare” means that you, as a physician, elect not to carry medical malpractice insurance in your medical practice. Medical malpractice insurance protects you and/or your practice from medical malpractice lawsuits filed by your patients. While every physician should have an asset protection plan in place, doctors shouldn’t hastily cancel their medical malpractice insurance without understanding their responsibilities under Florida Statute 458.320, which applies to Florida licensed physicians. F.S. 458.320 outlines certain consequences for doctors who lose medical malpractice lawsuits while uninsured by medical malpractice insurance.

F.S. 458.320 states that if a doctor does not have medical malpractice insurance and loses a medical malpractice lawsuit, then that doctor will still have the responsibility to pay the claimant whether or not the assets are protected. Pursuant to this Florida statute, the doctor is required to pay the claimant either $100,000.00 or $250,000.00 if he loses a malpractice lawsuit (assuming that the judgment is over that amount). Specifically, the doctor has to pay the judgment creditor the lesser of the entire amount of the judgment with all accrued interest of either $100,000.00, if the physician is licensed but does not maintain hospital staff privileges, or $250,000.00, if the physician is licensed and maintains hospital staff privileges. Such payment must be made within thirty (30) days from the receipt of notice for payment from the Department of Health. If the doctor refuses to pay the judgment creditor (claimant) or fails to negotiate a payment plan, then the doctor can be sanctioned by the Department of Health. That means, even if a doctor has an iron clad asset protection plan, they may still be required to pay the judgment creditor some award or risk losing their medical license.

The statute also outlines an exception for payment that states that doctors can file an appeal within thirty (30) days of receiving the notice from the Department of Health. The doctor must send the Department of Health a Notice of Appeal prior to the expiration of thirty (30) days in order to postpone the requirement of such payment. Therefore, even if you have received a medical malpractice judgment against you, you still have options so long as you act quickly and contact a knowledgeable attorney timely.

Further, doctors should still implement asset protection planning even though this statute may require payment of claims, regardless. The reason for this is because lawsuits occur everyday and may not have anything to do with your practice of medicine. Having an asset protection plan deters most future potential creditors from suing you for frivolous claims. Every doctor should utilize the benefits of asset protection planning.

Contact the Attorneys of The Noble Law Firm, P.A. to assist you with your litigation and/or asset protection needs.

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Understanding why Fraudulent Transfer is NOT a Criminal Offense

Fraudulent transfer is a civil remedy creditors use to reach assets that were transferred after a creditor threat for the purpose of hiding or concealment of such assets. To commit a fraudulent transfer you must have the intent to defraud or delay creditors in obtaining your assets in satisfaction of a civil judgment against you. Fraudulent transfer is a civil remedy, not a crime. The basis of fraudulent transfer is that you have transferred assets after you have received a judgment against you.

One common misconception in a fraudulent transfer claim is that you may be subject to penalties similar to those of criminal fraud (which include fines and/or imprisonment). We cannot stress enough how untrue this misconception is and that fraudulent transfer is strictly a civil remedy. Criminal fraud involves actions such as mail fraud, stealing identities, counterfeiting, bank fraud, tax evasion, embezzlement and bankruptcy fraud. Fraudulent transfer laws only allow a creditor to take advantage of civil remedies that primarily include the return of assets in the event the creditor wins their case. In other words, there are almost no circumstances that will deem you to be held criminally liable for protecting your assets from creditors; however, you still should understand how to do it correctly.

The best way to protect assets from creditors is to be proactive. That means the assets should not be under duress or subject to an imminent or current creditor attack. However, even if you are in a lawsuit, our attorneys can still protect your assets as the only cause of action your creditor can pursue is fraudulent transfer, which is only a civil remedy. The best asset protection strategy is being proactive, but you still have many options if you already have a creditor attack.

Contact the Attorneys of The Noble Law Firm, P.A. to discuss how to legally and ethically protect your assets.

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Using Belize Trusts for Asset Protection Planning

If you are interested in protecting assets internationally, the Belize Trust may be the right option for you. Belize is a country on the east coast of central America that has incredibly debtor friendly laws. That is why the Belize trust is one of the most favored tools in asset protection planning.

A trust is an estate planning tool by which a settlor (or grantor) creates a document that appoints a trustee to handle and distribute assets to specific beneficiaries at their death. During the life of the settlor the trustee may also support the settlor and/or beneficiaries. A trust protector may also be appointed in certain circumstances (almost always in international trust planning). The trust protector provides a check and balances system whereby the trustee cannot make certain decisions without obtaining the trust protector’s written approval. Once the settlor executes the trust and the trustee accepts the terms, the next step is funding. You may fund the trust with any tangible asset (i.e.: bank accounts, cash, savings accounts, brokerage accounts, life insurance, retirement benefits, etc.).

A trust can be set up in a variety of jurisdictions. Domestic trusts are usually set up in the state where the settlor lives. Jurisdictions like Florida oftentimes have more favorable trust laws, while other states have less favorable trust laws. However, International trusts offer greater asset protection benefits since the United States does not have jurisdiction over the assets.

International trust jurisdictions are not all created equal. Some countries, such as Belize, offer much more favorable debtor protections than other countries. For instance, Belize update their legislation regularly to keep up with the changing laws of the United States and other countries. Belize also allows the use of other banking jurisdictions to hold assets. The favorable laws of Belize make it a preferred international trust jurisdiction.

Belize offers several asset protection advantages. Belize trusts are extremely flexible and allow you to draft many asset protection clauses into the trust agreement. The courts in Belize does not recognize judgments from courts outside of the country; therefore, a debtor has to re-litigate the case in Belize using local counsel. The creditor must also post a bond prior to litigating in Belize. This can become costly and burdensome and certainly can be used as a deterrent against a creditor attack. The taxation laws in Belize are also very favorable since Belize does not impose any taxes on the trust, or the income earned by the trust over time.

Further, Belize does not have a vesting period or waiting period for assets to become protected once they are funded into a Belize trust. Therefore, a creditor cannot file a cause of action against you for fraudulent transfer. No vesting period means that assets moved into a Belize trust are automatically protected from creditor threats [no statute of limitations for creditors to file a fraudulent transfer action]. There are no other international jurisdictions with comparable laws.

Contact the Attorneys of The Noble Law Firm, P.A. to discuss whether international trust planning using the Belize trust is a good option for you.

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