What do you think of when you think of Florida? Warm weather? Palm trees? Miles of beaches? Sure, the Sunshine State has all those, but do you know about the many other benefits of living in Florida?
Florida has no income tax. None at all. That alone is the reason many come to Florida, whether the savings are several thousands of dollars or hundreds of thousands of dollars. Florida also has no estate or inheritance tax. With the federal estate tax exemption at $11.58 million per person, a married couple in Florida can shelter over $23 million from estate taxes.
Floridians can rest assured that there are many legal protections for their assets. Florida law provides for a “homestead” exemption from creditors, meaning that your home, no matter how valuable, cannot be taken in a lawsuit. Retirement accounts, annuities, and life insurance are also fully protected.
Florida is one of only eight states that exempts inherited IRAs from creditors. So if you’re the beneficiary of a parent’s IRA, it’s fully protected if you should get sued. And if your children or grandchildren happen to live in Florida, they can receive your retirement accounts and have the same protection.
Marital Property Protections
In Florida, a married couple can own virtually any kind of asset as tenants by the entirety; which means that a creditor of just one spouse cannot touch the property. This includes bank and investment accounts, business interests, and promissory notes.
Revocable Living Trusts
While court fees for probate in Florida are low, we usually recommend the use of revocable living trusts to avoid the delay a court proceeding entails. Living trusts are very common in Florida, and bank and other institutions are used to having accounts and real estate owned by trusts. Should any assets be left out of a trust, a simple and quick Summary Administration proceeding can be used for assets up to $75,000 in value.
Florida has modern, comprehensive trust laws. Land trusts can be used to provide anonymity of ownership, irrevocable trusts can be modified to address changes in circumstances, trust property can be moved (decanted) from old outdated trust to one with more favorable terms, and trusts can last up to 360 years.
Residency in Florida makes good sense from a financial and estate planning standpoint. And when you can play golf in January, that’s certainly a bonus!
Contact a Henderson Franklin Estate Planning Attorney
To schedule an appointment to discuss transferring or establishing a Florida estate plan, please contact one of our trust and estate planning attorneys:
Buying Florida real estate isn’t all that different from purchasing real estate in another state. You will want to ensure the property’s title work permits your intended use and doesn’t contain any surprises, such as a hefty code enforcement lien; the land survey shows the improvements are located within your property’s boundaries and neighbor’s improvements do not encroach; and, any structure on the property is sound. Below are a few things that may be different.
Florida allows title companies to close transactions without attorney involvement. While this may save the parties a little on the closing costs, the savings is not likely worth the increased risk exposure. After all, a title company is a neutral closing agent, which doesn’t look out for the buyer’s needs, including reviewing the contract, title, survey, and closing documents to ensure the buyer is getting what he or she bargained for and not assuming unnecessary risk or liabilities in the process.
Wetlands and Wildlife
The presence of a Florida wetland or endangered species can create a big, costly, and possibly insurmountable problem. It’s important to engage the appropriate consultants early to address these issues.
Real Estate Taxes
The Florida Department of Revenue collects a conveyance tax (documentary stamp tax) based on the purchase price of the property at the time the deed transferring title is recorded. The tax is equal to 0.007 multiplied by the purchase price, subject to whole and partial exemptions. The liability for the tax is typically based on local custom, which varies by county.
Florida also collects financing taxes (documentary stamp tax and intangible tax) on most financed real estate acquisitions. Collectively, those taxes are typically equal to .0055 multiplied by the loan amount.
Florida’s homeowners’ insurance premiums may be higher, so be sure to contact a Florida insurance agent for estimates.
Florida’s title insurance rates are relatively high. Here are the rates:
From $0 to $100,000 of liability written
From $100,000 to $1 million, add
Over $1 million and up to $5 million, add
Over $5 million and up to $10 million, add
Over $10 million, add
Rights to Minerals
As Florida is rich in minerals, selling landowners throughout its history have used reservations in deeds to preserve their rights to minerals existing under the land sold. Those mineral reservations can be problematic for buyers and investors, especially when the reservation is coupled with a right to enter the property and mine for minerals.
Contact a Henderson Franklin Real Estate Attorney
The real estate attorneys at Henderson Franklin, several of whom are board-certified specialists by the Florida Bar in real estate law, assist clients in all aspects commercial and residential real estate and development. To schedule an appointment, please call the real estate department directly at 239-344-1275 or any one of Henderson Franklin’s real estate attorneys: