Why Snowbirds Should Make Florida Their Permanent Residence

By: Braxton Bowen, Esq.

As the end of the summer months approach, many snowbirds—individuals who migrate from colder northern areas to the warmer southern states—start planning their return to Florida. Beyond its appealing climate, Florida offers numerous benefits that make it an attractive state of residency. From financial perks to robust asset protection laws, here are six compelling reasons why snowbirds should consider making Florida their permanent home.

1. No State Income Tax. Florida is one of the few states that do not impose a state income tax. This means residents don’t pay state taxes on earned or unearned income, such as interest, dividends, and retirement income. This can result in significant savings for those who spend their summers in high-tax states like New York, New Jersey, or Massachusetts.
2. No State Estate Tax. Florida does not have a state estate tax, allowing residents to preserve more of their wealth for future generations. This lack of estate tax can lead to considerable savings for your heirs.
3. Strong Asset Protection. Florida’s asset protection laws are among the strongest in the country. Florida’s Constitutional Homestead exemption, for instance, protects your Florida primary residence from forced sale by most creditors, providing an added layer of security for your estate. This protection is limited by the size of your land, but there is no upper limit on the value. Further, the transfer of your Florida homestead to your heirs at law (i.e., your family) is also protected from nearly all of your creditors.
4. Homestead Tax Exemption. Permanent residents in Florida can further benefit from a Homestead Exemption, as it can reduce a property’s taxable value by up to $50,000 and Florida’s Save Our Homes Act caps the annual increase in the assessed value of the homestead to 3% each year, making it a valuable benefit for homeowners.
5. Flexible Trust Options. Florida offers various trust options tailored to individual needs, including revocable trusts. These trusts provide flexibility, allowing modifications during your lifetime to adapt your estate plan as circumstances change.
6. Control Over Asset Distribution. Florida trusts allow great control over the distribution of your assets. You can set specific conditions or milestones for asset distribution, ensuring your wishes are honored even after your passing. Plus unlike wills, which become public during probate, trusts in Florida offer greater privacy. The contents of your trust and asset distribution details remain confidential, safeguarding your family’s financial information.

Steps to Establish Residency

To fully benefit from Florida’s advantages and establish it as your primary home, it can be crucial to ensure you have adequately evidenced your move to a permanent Florida domicile. This will be especially true if the state you are moving from has state income or estate taxes, as you will need you former state to recognize your new domicile. Taking the following steps can be objective proof of your new residency:

1. File a Declaration of Domicile which declares Florida as your permanent home and can be filed with the Clerk of the Circuit Court in your county.
2. Switching to a Florida driver’s license is crucial in establishing residency.
3. Register to vote in Florida is a strong indicator of your primary residence.
4. Claiming homestead and receiving your mail at your Florida residence.
5. Ensure your vehicle is registered and insured in Florida.
6. Reflect your Florida address in all legal documents, including updating your wills, trusts, and health care designations, to be governed under Florida law.
7. To solidify your residency, you should live in Florida for more than six months each year.

Bottom Line

By taking these steps and leveraging the numerous benefits Florida offers, snowbirds can achieve a more financially secure lifestyle. The significant tax savings, robust estate planning laws, and strong asset protection mechanisms make Florida an ideal state for those looking to preserve their wealth and ensure a smooth transfer of assets to future generations.

For assistance with your Florida estate plans, please reach out to me at braxton.bowen@henlaw.com to schedule a consultation.