We all know about the snowbird, the retiree, the investor, the tourist who asks the question: how do I relocate to Florida, how do I become a resident?
Beyond the weather and lifestyle, there are obvious reasons why people want to make that move, including the lack of Florida income and estate taxes, exemptions for property tax valuation and protections against future increases, and greater opportunities for asset protection for our homestead, and insurance and retirement plans.
From Florida’s perspective, there is not much that needs to be done to establish Florida as our domicile. Some of the steps that can or should be taken include:
- File a Florida Declaration of Domicile
- Obtain a Florida Driver’s License (or Florida non-driver ID)
- Register your vehicles
- Register to vote in Florida (and also vote)
- Open local bank accounts and safe deposit boxes
- Notify tax officials and Social Security (address changes)
- Apply for the Florida homestead exemption (and don’t rent out your homestead!)
Update your Estate Plan
However, the real challenge is to create the necessary separation from the prior state of residency, as Florida and other states allow only one domicile. Many states have strict and detailed requirements for terminating or separating residency, some of which are not always intuitive or convenient. Those states do not want to give up their income and/or estate tax revenue from their prior residents.
We routinely hear horror stories from our relocating clients about their difficulties in creating the separation. Each state is different, and some efforts may not be realistic, but the following suggestions will give an idea of the extent of efforts that must be taken with respect to the prior state to show the intent to remain Florida permanently or indefinitely:
- Abandon your prior domicile (sell it or rent it out)
- Divest of ALL (as much as possible) property ownership
- Divest business ownership and/or employment
- Keep your family heirlooms, furniture and keepsakes in Florida residence
- Stay more than 183 days per year in Florida (not just 183 outside of your former state)
- Change medical and other professionals to Florida
- Move accounts (e.g. phone accounts and credit cards), and change all billing addresses to Florida.
- Join organizations such as clubs, religious groups and become active with local charities in Florida, and withdraw or classify as non-resident with your non-Florida groups;
- Arrange for family gatherings in Florida instead of the old state.
- Subscribe to local newspapers in Florida and cancel subscriptions in the old state.
- File your federal income tax return with the new appropriate IRS service center and show Florida as your address.
- Update the listed address on your passport to Florida.
- Send notifications of a change of address to family, friends, business associates, professional organizations, credit card companies, brokers, and insurance companies.
- When traveling, leave from and return to Florida (and maybe avoid flying through or over old state).
- Keep a calendar so you can show when you were in Florida each year.
- Have your name removed from the voter registration list in your old state
- Turn in your driver’s license (Florida DMV will take it when you get a Florida license)
- Pay any income tax in the old state as a non-resident if applicable
- Mark your last state income tax return “FINAL” and use Florida address
- Close all accounts in the old state
Many of these steps are complicated enough that a local (in the prior state of residence) attorney or CPA should be consulted. Overall, make every attempt to be consistent and don’t try to save money by trying to keep two domiciles because insurance rates or taxes will increase if you have to give up your now out of state domicile. You could end up with problems (legal and financial) in both Florida and the other state.
Sincerely,
Berlin Patten Ebling, PLLC
Article Authored by Christopher Caswell, Esq. ccaswell@berlinpatten.com
This communication is not intended to establish an attorney client relationship, and to the extent anything contained herein could be construed as legal advice or guidance, you are strongly encouraged to consult with your own attorney before relying upon any information contained herein.
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