Ruth Madoff’s $9 million Palm Beach mansion sits on property that appears too big to protect it entirely from creditors, if she tries to shield it with homestead protection – and manages to fend off federal prosecutors who want to seize it.
But that may provide only a small sliver of comfort to burned investors trying to get money back from her husband Bernard Madoff’s massive Ponzi scheme.
The property, at 410 N. Lake Way, covers 0.54 of an acre, according to the Palm Beach County Property Appraiser’s Office. Under the Florida Constitution, up to half an acre can qualify for protection as a person’s primary residence within a municipality, in this case the town of Palm Beach.
So what happens to a property that is too big? Creditors can come after the part greater than half an acre, but not the rest if the owner otherwise qualifies for homestead protection, said Steve Rubin, a Boca Raton attorney who leads the Palm Beach County Bar Association’s real estate continuing education committee.
“If it’s over a half-acre, the creditor would be able to at least claim that portion of the property which is over the half-acre,” Rubin said. “It would be up to a court to decide how to equitably enforce that.”
If previous cases are any guide, there are many ways the issue could be sorted out in civil court. Among the possibilities, according to Rubin: A court could order her to sell off a small piece of the property if it is easily divisible, or she could agree to write a check for a settlement amount, or the court could order a sale of the whole property and divide the proceeds proportionally.
In the end, she could wind up keeping the vast majority of the value of a property assessed at $9.4 million in 2008.