Florida has long been known as a mecca for retirees. In fact, earlier this year WalletHub ranked Florida #1 overall in “best state to retire.” Their assessment accounted for over 40 individual factors of “retirement-friendliness,” primarily based on 1) cost of living, 2) health care, and 3) overall quality of life.

The scores for the top three states—Florida, Virginia, and Colorado—were fairly close:

Other than the sun and beaches, one of Florida’s biggest selling points for retirees is its robust asset protection and estate planning statutes. Given the subjective nature of a person’s decision to change residency to Florida, courts and taxing agencies generally look to objective criteria to judge someone’s intent to become a Florida resident. In short, unless you’ve taken the proper steps to prove that you are now a Florida resident, you may run into problems.

First, generally a state can only tax its non-residents on income earned or assets located in that state. When you relocate to Florida and bring your assets and income with you, your former home loses the ability to tax you. So, to prevent the loss of tax revenue, the former state may attempt to treat you as a resident, unless you prove otherwise. In effect, this could counteract benefits you received by moving to Florida. 

Second, estate planning, asset protection, and tax mitigation strategies are controlled by both federal and state laws. If you want to take full advantage of Florida’s beneficial tax code and asset protection options, you need to make sure that you are a Florida resident and thereby subject to the laws of Florida.

Proving Florida Residency

There is no official checklist for proving you are a new Florida resident. But there are certain steps you can take to formalize your residency in Florida, to help demonstrate that you are not a resident of your former state, and to reap the full rewards of Florida’s beneficial estate planning laws.

• Obtain a Florida driver’s license as soon as possible and change your automobile tags and registration.
• Register to vote in Florida (and then vote in the first election).
• Change your address with important providers and government agencies (e.g. car and health insurance, cell phone company, banks and credit cards, loan servicers, IRS, or Social Security).
• Update your address for magazine and newspaper subscriptions as well as for streaming services like Netflix, Disney+, or Hulu.
• Consider transferring legal, financial, and tax relationships to Florida advisors.
• File a “Declaration of Domicile” in the Office of the Clerk of the Circuit Court for the county of your new residence.
• In the year you make Florida your permanent residence, file any state tax returns in your previous state as a “non resident.”
• Consider buying a home. If you own the home, then you can apply for the Homestead Exemption. If you rent a home, consider a longer-term lease
• If you are involved in any business transactions as an individual, include that you are a resident of Florida in any legal documents.
• Consider transitioning your involvement in civic, religious, or charitable organizations in your former state to organizations in or affiliated with Florida.
• Update your estate planning documents to reflect that you are a “resident of Florida” and to make sure you are availing yourself of Florida-specific estate planning, asset protection, and tax mitigation strategies.
• In short, just get in the habit of calling Florida “home”!

Help for New Floridians

If you have or are planning to relocate to Florida, these tips will help you transition to your new state of residency and ensure you can properly take advantage of the tax laws of Florida.

But if you would like more personal advice on establishing residency, you’re in luck! I am licensed to practice in New York, New Jersey, and Florida, and as such I am uniquely suited to help clients like you navigate the various estate planning issues involved in relocation and multi-state estate planning.

If you’re ready to get started on updating your estate plan to reflect your new state of resident, call, email, or text me now to set up a complimentary Financial Legacy Review. I will use this meeting to understand your current and future financial goals, update you on complex legal and tax issues, and explore the full range of financial and retirement strategies that are available to new Florida residents.

If you aren’t quite ready yet and you just want to learn a bit more about what is involved in relocating or retiring to Florida, I would encourage you to register for my monthly webinar for new Florida residents. This free seminar covers a range of topics, including:

• The fundamentals of Florida’s estate planning, asset protection, and tax laws,
• Why and how to establish official Florida residency,
• Why new residents need to update estate planning documents,
• How to take full advantage of Florida’s homestead protections, and
• How to avoid expensive multi-state probate.

I look forward to speaking with you!