The Benefits of Florida Domicile
Someone recently asked me why he should go through the headache of filing for a declaration of domicile in Florida when he’s been retired here for over 12 years. I told him it all comes down to how much money he wanted to give two or more states that may claim domicile and impose estate and inheritance taxes if he doesn’t make a decision.
Get your questions about domicile answered by me and Howard Hujsa, Esq., the co-author of my book The Florida Domicile Handbook on April 5th…scroll down for details.
Funny thing about the government, it doesn’t really care where you call home. You may have more than one residence in more than one state, but only one of them can be your domicile or permanent home. Where you are domiciled is a question of intent and is often based on objective factors such as where you spend most of your time, where you vote, where you celebrate holidays, where you do your banking, where you give to charity, etc. But if you don’t actually file the declaration, you’re leaving it to chance. And believe me, each state you own a home in may turn your chance into their opportunity.
Here are some reasons why you should change your domicile to Florida:
- NO INCOME TAX – This could represent a substantial savings to you and your family. While Florida does not have an income tax, it has an intangible personal property tax assessed at the rate of one dollar per thousand dollars of value of intangible property, such as stocks, bonds, and mutual funds. There is an exemption for the first $250,000 of total taxable value for individual filers (double for joint filers) and a discount for early filers. This tax can be completely avoided through a properly structured Florida Intangibles Tax Trust.
- ASSET PROTECTION – When you establish Florida domicile, some assets are protected from the claims of creditors. Those assets include your home, life insurance, annuities, IRA, and assets held in a properly structured Florida corporate entity.
- ESTATE TAXES – Starting this year, the Federal government no longer shares estate tax revenues with the states. In response, many states have “decoupled” from the Federal estate tax system and have established separate estate taxes that add to the Federal tax. This additional state tax increases the total estate tax due at your death. Florida is one of only three states that has a state constitution that does not allow the imposition of a decoupled state estate tax.
- HOMESTEAD TAX EXEMPTION – Florida provides taxpayers who own a permanent residence a $25,000 homestead exemption against real property taxes. In addition, any residence that qualifies for the homestead exemption is entitled to a cap of three percent per year on the percentage increase of the valuation for tax assessment purposes. Also, under Florida law there are special safeguards in the homestead for a spouse and any minor children of a homeowner.
- ESTATE PLANNING – Florida is home to a significant number of top wealth and estate planning professionals who can assist you in managing and planning your estate. In addition, the laws of Florida are very favorable towards estate planning issues. For example, a Florida trust can be designed to last up to 360 years, serving several generations of your family – without the imposition of estate taxes at each generation.
Establishing your intent to make Florida your primary residence is not difficult and, as described above, provides many benefits for you and your family.
Join Mike Kilbourn and Howard Husja, the authors of The Florida Domicile Handbook on April 5, 2010, at 10 a.m. in the Naples Daily News Community Room for a very informative seminar on the benefits of Florida domicile. To RSVP for this seminar, please call (239) 263-4856.