Homestead Exemption
A legal provision that protects a portion of the value of a primary residence from creditors and may affect property division in divorce.
Understanding Homestead Exemption
Homestead exemptions vary by state and can significantly impact divorce proceedings. In some states, the exemption protects a set dollar amount of home equity from creditors, while in others (like Florida and Texas) it provides unlimited protection. During divorce, the homestead exemption can affect who gets to keep the home, how equity is divided, and whether the home can be forced to be sold. Some states give the custodial parent preference for the homestead.
Real-World Examples
Florida's unlimited homestead exemption meant the wife's $800,000 home equity was protected from her husband's business creditors during the divorce.
State-by-State Variations
Texas and Florida offer unlimited homestead protection. Most other states cap it — Kansas at $125,000, California at $300,000-$600,000 depending on county.
Related Terms
The primary residence where the married couple lived together, often the most valuable and emotionally significant asset in a divorce.
Home AppraisalA professional assessment of a home's fair market value, typically required when dividing real estate in a divorce.
Fair Market ValueThe price a willing buyer would pay a willing seller for an asset, with both having reasonable knowledge of the relevant facts.
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This definition is provided for educational purposes only and does not constitute legal advice. Divorce laws and terminology may vary by state and jurisdiction.
Always consult a licensed attorney in your area for advice specific to your situation.