Is It Time to Make Your Move?
As you near retirement or continue to enjoy it, you may be considering becoming a Florida Resident. Well, our team will be the first to tell you that we think there may be no better time than the present to make that move.
There are many potential benefits of Florida Domicile, including the Florida Homestead Exemption and protections, as well as not having to pay state income or estate taxes.
First, Consider Our State
The beaches are great but it is important to understand that claiming Florida Domicile is not as straight forward as filling out a document or simply owning a property here. It’s based both on a person’s physical presence in the state as well as the individual’s “intent” to recognize and maintain Florida as their home either permanently or at least indefinitely.
We mention this because there is a strong trend among states to move away from simply “counting days” and move instead toward closely examining the intent of the individual to establish a primary and permanent home. Domicile is generally supported by how a person lives their life and how much of that life is tied to Florida.
Florida, however, has no set legal standard for becoming a resident of the state.
Next, Consider Your Own State
The question of residency doesn’t only revolve around Florida Law, but is also determined under the laws of the state you are departing. Some states are moving to define “residency” more strictly for state income tax, property transfers, and estate taxation.
Many people looking to change their residency are aware of the “six months and a day” rule that determines whether someone is a resident or non-resident, but very few states today are still following this rule.
If you are planning to claim Florida domicile, there’s likely more to consider than you realize. But these considerations don’t have to cause needless stress. Proper investment and estate planning can help you not only identify but also navigate issues such as these so that you can make the right decision based on your and your family’s unique situation.
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Many states legislatures and departments of revenue are becoming more aggressive in defining residency and enforcing their state’s respective rules. For example, residents are usually subject to estate tax on the value of their entire taxable estate – regardless of geographic location – above a specified threshold. Residents are also typically subject to income tax on all income, regardless of the geographic source. However, non-residents can also be subject to these same taxes.
And it doesn’t end with your financial records. There are myriad financial considerations that may play into what you review, including doctor visits, medical treatments, fitness memberships, affiliations with community organizations, locations of family and holiday gatherings, phone records and devices showing geographic location, and much more.
Contact Us
If your personal situation is complex, we recommend consulting with your tax professional and legal counsel. Our team is also here to help and can ease the burden you may be feeling. To learn more about the ways in which we can help you with your investment planning and work with you to design a plan to help make your dreams a reality, please get in touch with us so that we can schedule a virtual or in-person meeting to share more information with you.
Wells Fargo Advisors Financial Network is not a tax or legal advisor.