Tax benefits and sunshine: What’s not to love?
For many reasons including the great weather, many people choose to purchase property and spend time in Florida. Florida also has several significant tax benefits for its residents; however, qualifying for these benefits depends on whether Florida is your primary residence.
Two of the best Florida tax benefits are no state income tax and no state estate tax, both of which are likely to remain in place because they are written into the Florida Constitution. As a result, property owners consider changing their primary residence to Florida. In order to make this change, there is a number of steps that should be completed.
While Florida will accept your decision to become a Florida domicile, your current state may try to challenge this based upon their unique laws and your specific facts and circumstances. Additionally, with the current deteriorating condition of many states’ economies and the increasing need for state tax revenue, states could be increasingly aggressive in auditing the primary residence of taxpayers.
Therefore, it’s important to understand what steps should be taken to change to a Florida domicile, and the sooner the better. While not all of these steps are necessary, here is a list of 7 steps to take to change your domicile to Florida:
- File a “Declaration of Domicile” in the Office of the Clerk of the Circuit Court in your county of domicile which declares yourself a Florida domicile
- Change your mailing and billing addresses to your Florida home
- File for homestead exemption for your Florida property
- Register to vote in Florida elections and cancel your old state’s voting rights
- Obtain a Florida driver’s license and register your vehicle and license plates in Florida
- Transfer bank and brokerage accounts to Florida
- And as importantly, update your estate planning documents to Florida documents. Most people aren’t aware that the first line of your Last Will says something to the effect of: “I, John Smith, a resident of Parkland, Florida.” So, if your Will was done in New York, it declares you a domicile of New York and you don’t want that to be your Last Will if you are a Florida Domicile.
For your old state income taxes, be sure to file a final tax return or a non-resident income tax return in your prior state.
Other recommended actions include to become affiliated with Florida social organizations such as churches and temples; use local physicians, and re-title real estate that might be owned outside of Florida into your Florida revocable living trust. It would be helpful to move your valuables and safe deposit box to Florida. Lastly, keep track of where you are each day of the year, including the times you are traveling. The rule generally is that you should spend a majority of your days each year in Florida – you don’t have to spend six months and a day, you just have to be in Florida for more time than any other state to qualify. As long as you truly intend to have Florida as your home, you will be fine … and doing the above will achieve those goals so you can enjoy the rewards of a Florida residency – including smaller snowdrifts!
Learn more by attending an upcoming complimentary dinner workshop at Ruth’s Chris or Abe & Louie’s Steakhouse in Boca Raton or Fort Lauderdale. This workshop is best suited for those over age 60 with between $500,000 to $10 million in investable assets.
Call our office to register now at 1-800-807-5558.
Craig Kirsner, MBA, is a nationally-recognized Author, Speaker, and Retirement Planner, whom you may have seen on Kiplinger, CBS, ABC, NBC, Fox, Fidelity.com, Nasdaq.com, MSN Money, Yahoo Finance, and others. Craig is the author of Retire With Confidence: Preserve and Protect Your Wealth And Leave A Legacy and creator of the Preserve and Protect Retirement System. He holds undergraduate degrees in finance and risk management from the University of Florida, as well as an MBA in finance from the Chapman School of Business at Florida International University. He has passed the Series 63 and 65 securities exams and has been a licensed life insurance and fixed annuity agent for 25 years.
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Stuart Estate Planning Wealth Advisors have not affiliated companies. Stuart Estate Planning Wealth Advisors is an independent financial services firm that creates retirement strategies using a variety of investment and insurance products. Neither the firm nor its representatives may give tax or legal advice. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company. 604428