"Are my assets safe?" If you've ever asked yourself that question, you're not alone, and unfortunately, the answer might not be as comforting as you think. Many Florida residents and business owners believe their assets are shielded by LLCs, homestead protections, or trusts, but here's the truth: there are legal loopholes that creditors know how to exploit, and they're often hiding in plain sight.
In this blog post, we'll walk you through how creditors can legally get access to your assets, even when you think you've done everything right, and what you can do to stay one step ahead.
What Can Creditors Legally Go After in Florida?
In Florida, creditors can't take everything—but they can still go after more than you might expect. Here's a quick overview of what's typically fair game:
- Bank accounts not in a protected trust or account
- Real estate not covered under the Florida Homestead Exemption
- Ownership interest in businesses (especially single-member LLCs)
- Non-exempt personal property (vehicles, valuable jewelry, art, etc.)
And here's where it gets tricky: even if you think something is protected, the way it's titled or structured could open the door for creditors.
Can Creditors Pierce the Corporate Veil in Florida?
Yes—and this is a big one. Many small business owners believe that forming an LLC or corporation automatically shields their personal assets. That's only partially true.
Florida courts can and do pierce the corporate veil if:
- There's evidence the business is a mere alter ego of the individual
- The business was undercapitalized (no real money behind it)
- Formalities weren't followed (like proper accounting or minutes)
- There's fraud or misrepresentation involved
In plain English: if you treat your LLC like your personal piggy bank, a creditor can ask the court to ignore it and go straight after your personal property.
Can a Trust Protect You from Creditors?
Not always. Many people create revocable living trusts thinking they're bulletproof. But in Florida, assets in a revocable trust are still considered available to the grantor—and that means creditors can come after them.
Only irrevocable trusts offer solid protection from creditors—but even then, only if they're properly drafted and funded. And even then, fraudulent transfer laws could still apply.
What Is a Fraudulent Transfer and Why Should I Care?
This is one of the most misunderstood loopholes that creditors love to use. If you transfer assets after a creditor claim arises, even if it's to a trust or to a spouse, it may be considered a fraudulent transfer under Florida law.
That doesn't mean you need to have had criminal intent—just moving assets around to protect them after the fact can land you in hot water. Courts can undo the transfer and give the creditor access anyway.
How Can I Protect My Assets from Creditors in Florida?
This is where things shift from "doom and gloom" to proactive planning. There are legitimate strategies that do work—but they need to be done ahead of time and with the help of someone who understands Florida asset protection laws inside and out.
Top Strategies Include:
- Properly structured irrevocable trusts
- Domestic asset protection trusts (under certain state laws)
- Florida homestead exemption, when done right
- Tenancy by the entirety ownership for married couples
- Using multi-member LLCs with well-drafted operating agreements
- Gifting strategies that comply with IRS and Florida statutes
Each case is different. The key is to tailor the strategy to your specific situation—and make sure you're not accidentally creating exposure through bad drafting or execution.
Can I Be Held Liable for a Business Loan or Debt Personally?
Absolutely—especially if you signed a personal guaranty. Many small business owners don't realize that signing a guaranty can make them personally liable for business debt, even if the company folds.
Also, if a creditor can prove you commingled funds or acted in bad faith, that separation between you and your company may vanish in court.
What Happens If a Creditor Wins a Judgment Against Me?
If a creditor wins in court, they can record a judgment lien and begin collection efforts. These can include:
- Garnishing bank accounts
- Placing liens on real estate
- Seizing non-exempt property
- Forcing turnover of certain business interests
Judgment liens in Florida are good for 10 years and renewable—so even if you think you're "off the radar," you might not be.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
