Are you considering a move to Florida? Whether for the warm climate, beautiful beaches, or exciting nightlife, there are many reasons why people choose to make the Sunshine State their home. But did you know that when it comes to estate planning, establishing a domicile in Florida can also offer multiple advantages?
In this blog post, we will discuss the benefits of estate planning as a Florida resident and provide an overview of how to establish a domicile in Florida. For those who are new to Florida and new to this process, understanding what is involved can help ensure that your affairs are properly taken care of and in order.
What Is the Difference Between Residency and Domicile?
When establishing yourself in Florida, it’s important to distinguish between residency and domicile. Residency is more focused on the physical presence you maintain in the state, while domicile is declared when you choose to make a permanent home in Florida with no intention of relocating.
Florida residency can generally be established by just renting or owning real estate in Florida, or even just spending an extended period in the state. This is often how people from out of state who spend their winters in Florida (often referred to as “snowbirds”) establish residency.
These people are still considered official residents of their home states, which means they pay taxes in those states and if they are living in Florida when they die, their estates will be distributed per the laws of their home states.
People who establish a domicile in Florida pay their taxes here and when they pass away, their estates will be disbursed according to Florida law.
Depending upon your estate planning needs, you may want to establish residency first and then change your domicile to Florida later.
How to Establish a Domicile in Florida
Making Florida your domicile is an important step for many out-of-state people considering estate planning. Establishing Florida domicile involves demonstrating that you've adopted the state as your permanent legal home for tax and other legal purposes.
It can be beneficial for those faced with decisions on end-of-life care, inheritance, trust management, and more. Steps to establish a domicile in Florida include but are not limited to the following:
- Purchase or rent a principal residence in Florida.
- Get a Florida driver’s license.
- Register your vehicle(s) in Florida.
- Register to vote in Florida.
- Change your mailing address to Florida.
- Transfer your bank accounts to Florida.
- Live in Florida most of the year.
- File your final income tax return in your former home state and/or file a non-resident income tax return in your former home state.
- File a Florida Declaration of Domicile.
Estate Planning & Asset Protection Benefits and Tax Advantages as Florida Resident
Establishing a domicile in the state of Florida can provide significant tax advantages when it comes to managing your wealth and estate tax planning. Establishing residence in this state can be beneficial because there is no income tax, no taxes on Social Security benefits or retirement income, and certain exemptions on property taxes.
In addition, you get access to financial facilities, such as banks practicing lower interest rates than those present in other states, allowing you to become more financially secure should anything unexpected arise.
If you're looking to secure your assets, establishing residency in Florida can provide you with several invaluable benefits. Florida's generous asset protection laws allow residents to protect their monetary investments from creditors, and these protections apply whether the individual owns real estate or has a significant amount of income.
It's never too early to start preparing your estate plan, and those who establish a domicile in Florida have an especially clear opportunity to do so in the most beneficial way. Knowing the state laws of your new domicile is critical to crafting an effective estate plan that correctly navigates consideration for tax purposes, long-term healthcare costs, and other variables.
Here in Florida, we offer many advantages for modern estate planning strategies, such as various trusts and ways to leave heirs a legacy, so it is important to speak with a qualified estate planning attorney who can help guide you through the amount of options available to you.
To learn more about establishing a domicile in Florida, and how that benefits your estate planning needs, call Dorcey Law Firm at (239) 309-2870 or contact us online today for a free initial consultation with our experienced Florida domicile and estate planning attorneys in Fort Myers. For more information about Dorcey Law Firm, read our clients’ reviews.