Protecting Your Homestead Proceeds Upon Sale Of Property -October 20th, 2016

October 20 th, 2016


Photo of Andrew Cuevas.

Cuevas, Garcia & Torres, P.A. .

Vantage Property Title Company.

Andrew Cuevas, Esq. – President
E-mail: [email protected].

Tel: (305) 461-9500
Fax: (786)362-7127



Mr. Andrew Cuevas, Esq., is the President of Cuevas, Garcia & Torres, P.A., and Vantage Property Title Company. Cuevas, Garcia & Torres, P.A., provides legal services in the areas of Community Association Law, Real Estate law, and Business Immigration, including title insurance services through Vantage Property Title Company. If you have any questions regarding this article or any other questions, you may contact Mr. Cuevas at (305) 461-9500 or via e-mail at [email protected]. If you are interested in reading previous newsletters, please visit, select the icon for Newsletters , and then choose the area of law you are interested in.

Protecting Your Homestead Proceeds Upon Sale Of Property

In a ruling which is useful for sellers of their primary residences, the Supreme Court of Florida affirmed the protected status of funds generated by the sale of a homestead property. The issue was whether proceeds from the sale of a debtor’s homestead retain their Article X, Section 4 Florida constitutional protection against a writ of garnishment when the funds were divided into multiple accounts, including a brokerage account investing in mutual funds and stocks? JBK Assoc., Inc. v. Sill Bros., Inc., Case No.: SC-977 (Fla. April 28, 2016). In finding that the funds retained their constitutional protected status the Court affirmed the Fourth District Court of Appeal decision, which in turn had affirmed the trial court decision.

In short, JBK, a judgment creditor of Sill, served a writ of garnishment upon Wells Fargo. Sill moved to dissolve the writ to protect his deposit accounts at Wells Fargo. As a result of earlier divorce proceedings, the couple’s marital home was sold, and Sill deposited his portion of the proceeds into Wells Fargo accounts, including an investment account.

The Supreme Court began by emphasizing the tradition liberal construction in favor of the homestead declared in Article X, Section 4 of the Florida Constitution exempting homesteads from forced sale. Further, the party objecting to the exemption, normally the judgment creditor, bears the burden “to make a strong showing that the claimant is not entitled to the claim exemption.” (Citations omitted) relying on two Florida Bankruptcy Court decisions.

The Court restated a three part test to protect proceeds from creditors after the sale of a homestead:

(1) there must be a good faith intention, prior to and at the time of the sale, to reinvest the proceeds in another homestead within a reasonable time;

(2) the funds must not be commingled with other monies;

(3) the proceeds must be kept separate and apart and held for the sole purpose of acquiring another home.

The Court recognized that allowing funds to be placed into investment accounts serves a practical purpose:

In today’s economic climate, in which traditional bank accounts do not garner any significant amount of interest earnings, we do not believe placing the proceeds from the sale of a homestead in the type of safe investment account at issue here demonstrates an intent so different from reinvestment in a new homestead within a reasonable time as to violate Orange Brevard.

The Court characterized Sills accounts as not being speculative and not turning over constantly.

So what is the careful debtor to do? When handling homestead proceeds it does bear attention to follow the “Court’s three part requirement” carefully, document the intent to reinvest funds in a new homestead and label the funds as “homestead.”

This article is solely a partial explanation of all the issues related to the topic of this newsletter, and is not to be considered legal advice. Homeowners should consult with its legal counsel to obtain explanations of all issues addressed herein and determine what procedures will most beneficial. This Memorandum is for informational purposes only and should not be relied upon as a legal opinion.