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What is Exempt Property?

Discover how exempt property works in the probate process and learn about the legal safeguards that protect certain assets from creditors.

Mitch Mitchell

Mitch Mitchell, @MitchMitchell

Product Counsel, Legal, Trust & Will

When someone passes away, their debts don't just disappear. The creditors of the deceased can actually file a claim to get paid from the assets of their probate estate. Of course, there are some expenses that have a higher priority and need to be taken care of first, but the estate is generally required to pay the creditors as much as possible from its assets.

Now, here's the good news: not all assets in probate are up for grabs by creditors. There are legal protections in place for certain types of property called "exempt property." State laws regarding exempt property are in place to help protect a part of a decedent’s legacy for their surviving spouse and children. Keep reading to find out more about this safeguard in probate.

So, there are safeguards in place to help protect the rights of family members when it comes to the distribution of assets in probate.

Exempt property definition

Exempt property is property that is protected from creditor’s claims, either in the context of probate or bankruptcy court. This means that some of your property is protected from creditors, and you or your estate won’t be forced to liquidate them in order to repay creditors for unpaid bills. 

Each state provides exemption statutes, so it’s advised that you review your own state’s exempt property list. Property in this list is protected and cannot be touched when you file for bankruptcy or when a creditor triest to collect debt. 

Understanding exempt property laws are invaluable when it comes to protecting your assets and thus your legacy for the loved ones who survive you when you pass away.

Common examples of exempt property

Again, property exemptions are determined on a state-to-state basis, meaning that the specific types of exempt property can be different based on the state in which you reside. 

However, in general, exempt property typically represents a person’s livelihood, or what they need to live and maintain a job. 

Here are some common examples of exempt property:

  • A set amount of equity in your primary residence (this is called a homestead exemption.)

  • Household items and furnishings such as furniture, bedding, and dishes.

  • Clothing for you and your family members.

  • Jewelry not exceeding the value of a standard wedding set.

  • A set amount of equity in your primary vehicle needed for transportation.

  • Tools or items that you require for your profession or business.

  • Tax-exempt retirement plans.

Using federal non-bankruptcy exemptions

While states may not offer all of the example protections listed above, they may provide different or additional exemptions. Further, each state will define the type, amount, and conditions associated with each type of exempt property. (For example, the amount of equity that is protected through the homestead exemption.)

Some states even provide residents with the option of choosing between the state exemption list and the federal bankruptcy exemption list. However, this is specifically relating to bankruptcies. For probate creditor’s claims, be sure to refer to state and federal nonbankruptcy exemption lists. 

Note that the mixing and matching of multiple lists is not allowed.  

Exempt property examples

The following provides examples of exempt property in two states: California and Florida.


For starters, California statutes do not allow residents to choose between state and federal exemption lists. Instead, it is the only state that provides residents with two state exemption systems. The resident or estate representative would simply select the list that works best. (Similar to the rules with state and federal lists, you cannot mix-and-match.) These two lists are referred to as System 1 (§704 exemptions) or System 2 (§703 exemptions.) 

Note that System 2 only applies in bankruptcy scenarios, meaning that if you are experiencing creditor’s claims outside of bankruptcy (such as during estate settlement), you must use System 1. 

Here are the California System 1 property exemptions:

  • The Homestead Exemption protects up to $600,000 in your principal residence, which could be a home, boat, condo, or even a planned development.

  • The Motor Vehicle Exemption protects up to $3,625 of equity in your car or other vehicle.

  • Personal property, including household items, home building and improvement materials (up to $3,825), jewelry (up to $9,525), heirlooms, health aids, bank deposits (up to $1,826) and Social Security payments ($3,825).

  • Wages

  • Tax-exempt retirement accounts and pension plans

  • Public benefit payments

  • Tools of trade up to ($9,700)

  • Insurances, such as life insurance policies up to $15,250


If you're a homeowner in Florida, chances are you're familiar with the homestead exemption. It's a protection embedded in the state Constitution that shields your primary residence (in most cases) from being forcibly sold to settle unsecured creditor claims. 

What's great is that this safeguard extends its shield to the "surviving spouse or heirs of the owner." Now, it's important to note that the homestead exemption won't shield your home against secured claims like a mortgage. However, it does come to the rescue when a creditor tries to take away the house from your surviving spouse or children. Plus, there's an added protection: the constitutional homestead exemption also safeguards up to $1,000 worth of personal property. So, you can rest a little easier knowing that your home and some personal belongings are protected. 

Section 732.402 of the Florida Statutes also provides additional forms of exempt property, which also protect the surviving spouse or children:

  • Household items (furniture, appliances, furnishing) in the decedent’s primary residence valued up to $20,000

  • Up to 2 motor vehicles (certain rules apply)

  • Any funds paid into a qualified college tuition program

  • Death benefits that are paid out by Florida law 

Exempt Property Exemptions

As the surviving spouse or child of a decedent, you shouldn’t assume that exempt property is automatically protected by the probate court. For instance, your state may require that you formally file a petition so that the probate court determines that such property is exempt and thus protected from creditors claims. Further, there may be a set timeline in which you must do so, such as a number of months from the date that you receive the estate administration notice. Therefore, it is in your best interest to act promptly if you wish to make sure that your exempt property is indeed exempt. Otherwise, you may risk waiving your exemption in the case that the estate must pay creditors. 

Understand Your State’s Property Exemptions

Whether you are planning your own estate or are a spouse wanting to understand their rights, it’s always a good idea to research the probate and property laws set forth by your state of residence. As seen here, exempt property laws vary widely from state to state. Not only do the items included in the list of exemptions vary, there are also variances in the exemption amounts. You’ll want to make sure both you and your loved ones are protected by default, and create a protection plan where state laws have blindspots. 

At Trust & Will, we understand that navigating the probate process can be overwhelming– but we're here to help.  Our plans provide clear, county-specific guidance and support from probate experts so you can stay on top of the process. Learn more about our probate offerings.

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