Why Choose Florida as Your Residence

There are many reasons why you might choose Florida as your residence. The sunny weather is a big draw of course but there are legal advantages when it comes to your estate plan to consider Florida. Below are four benefits of choosing Florida as your residence.

1. Florida Has No Income Tax. One of the greatest financial benefits of being a Florida resident is that there is no state personal income tax. In addition to prohibiting personal income tax, the Florida Constitution also forbids municipalities and counties from levying a personal income tax. Florida is only one of seven states that do not collect personal income tax. This can result in significant savings, especially for high-earning individuals.

2. Florida Has No Estate or Inheritance Tax. Florida has neither an estate or inheritance tax. This can provide significant savings to your heirs after you pass away. For example, Pennsylvania has a 4.5% inheritance tax rate on property that is distributed to your children and grandchildren. If you leave your $1,000,000 estate to your children, they would have to pay $45,000 in Pennsylvania inheritance tax. In Florida, your beneficiary will not owe estate taxes on their inheritance and your estate will not have taxes on it either. This makes Florida attractive for wealthy individuals wanting to reduce their tax burden. It is not unusual for folks to relocate to Florida from states with state inheritance/estate taxes for this very purpose.

3. Florida Has a Homestead Property Tax Exemption. In Florida, your primary residence is referred to as your “homestead.” Homestead properties are assessed at a reduced value, and there is a cap on future increases in assessed value. This is helpful because property taxes are based on the assessed value of the property.

The Florida homestead exemption can be up to $50,000. The Florida Constitution limits annual increases in assessed values of homestead property to three percent or the percentage change in the Consumer Price Index, whichever is lower. This rule ensures that your taxes will not dramatically rise, even if real estate prices rapidly rise. You may be able to transfer your Save Our Homes benefit if you move to a new home.

4. Florida Offers Protection From Creditors. Florida offers protection of primary residences from creditors. During a homeowner’s lifetime, the Florida homestead cannot be attached for forced sale by general creditors. However, both the federal and local governments may foreclose tax liens, along with mortgage holders and lien holders who provided services to your homestead.

Florida also offers creditor protection for assets held as tenants by the entirety, many retirement plans, 529 education accounts, and life insurance proceeds.

How Do You Establish Florida Residency?

To take advantage of all Florida has to offer, you must be a legal resident. There is not one step to becoming a Florida resident. Instead, you must prove that Florida is your primary and permanent home through the totality of your conduct. To best take advantage of becoming a Florida resident for protecting your assets and estate, discuss it with an Estate Planning attorney like top attorney, James Nici. He can guide your through the requirements and how to structure your estate plan in Florida.

Below are seven requirements that help establish Florida residency:

1. Spend the majority of your time in Florida. You should spend more than half of the year (183 days) in Florida. Travel records, utility bills, and other receipts can be used as evidence that you were living in Florida.

2. File Declaration of Domicile with the court. You should file a Declaration of Domicile with the circuit court of the county you reside. If you live in Naples, you should file the form with the Collier County Clerk. The declaration is a sworn statement that declares your intent to maintain a permanent home in Florida.

3. Own or rent a home in Florida. You should purchase a home or have a rental in Florida.

4. Obtain a Florida driver’s license. You should get a Florida driver’s license or state-issued government ID.

5. File tax returns with Florida as your resident state. On your federal personal income taxes, you should list your Florida address as your primary residence. You should file non-resident income tax returns in any other state where you own property.

6. Open bank accounts in Florida. You should use a bank that has a branch near your Florida residence and has all bank and credit card statements sent to your Florida address.

7. Update estate planning documents in Florida. You should reach out to a qualified Naples estate planning attorney to update your estate planning documents to ensure that they comply with Florida laws. James R. Nici is an experienced Naples lawyer who can assist you with your estate planning needs.

Call Naples Estate Planning Lawyer James Nici

If you have questions about establishing Florida residency and updating your estate plan in Florida,  do not hesitate to contact experienced Naples attorney, James R. Nici. He is Board Certified in Wills, Trusts and Estates by the Florida Bar Association.  Contact our office today at (239) 449-6150 or use our web form to set up a free consultation.