Homestead Exemption Applied to Jointly Owned Property

Reader writes that he and his mother own a Florida condominium as joint tenants worth about $70,000 with no mortgage. His mother has lived there for several years. The reader recently moved to Florida and into the condominium. The reader used to live in New York which has a $50,000 homestead exemption. He wants to know what happens to the condo if he files Chapter 7 bankruptcy in Florida.

If the reader files bankruptcy he will use New York exemptions since he has lived in Florida less than two years. Even though his mother paid for the condo the Trustee will try to attribute ½ the value ($35,000) to the reader because he is now co-owner. Technically, the mother made a gift of half the equity when she put him on the deed. However, his N.Y exemption of $50,000 will be applied to only his share of the equity ($35,000) . The condo should be exempt property in his bankruptcy.

posted by Jonathan Alper, bankruptcy and asset protection lawyer, Orlando, Florida