Should You Declare Florida as Your Domicile?
In its ordinary acceptance, a person’s domicile is the place where he or she lives or has their home. In a strict legal sense, the domicile of a person is where they have their true, fixed, permanent home and principal establishment, and to which, whenever absent, they have the intention of returning.
Why change your domicile to Florida? There’s no state income tax, there’s no state inheritance/estate tax, there are limitations on creditor wage garnishments and there’s Homestead Protection, which provides protection from creditors on homestead property (except mortgage holders, mechanic’s liens, and taxes). The advantages of Homestead Property in Florida are vast and complex, but here are a few highlights to consider:
- At the homeowner’s death, homestead property passes to beneficiaries clear of certain creditor claims if bequeathed to heirs.
- During the homeowner’s lifetime, homestead may not be attached for forced sale by certain creditors.
- There’s a real estate tax exemption of $50,000 annually.
- Through Save Our Homes Cap property assessment increases are limited to 3% annually.
- Homestead exemption is portable, meaning Florida homeowners who move from one homestead property to another in Florida have the advantage of transferring their accumulated savings from their previous home to their new home.
Recommended Items to Declare Florida as Domicile
- File a Declaration of Domicile with the Clerk of the Circuit Court in your county of residence.
- Declare your Florida residence as your homestead and obtain Florida homestead exemption. (Florida form DR-501)
- Obtain a Florida driver’s license or non-driver Florida identification card.
- Transfer auto insurance and registration to Florida.
- Register to vote and vote in Florida for all elections.
- Provide notice to the taxing and voting officials in your former state and county of residence that you have become a permanent resident of Florida.
- Fill out all documents, affidavits or questionnaires needed to terminate previous domicile.
- File federal income tax returns with Florida residence as the home address.
- Mark your final income tax return in your former state of domicile as “Final Return” and use your Florida residence as the return address. Attach a statement to your final returns that includes the date domicile was abandoned in former state and the date domicile was established in Florida.
- Establish Florida bank and investment accounts.
- Close out-of-state safe deposit boxes; open Florida safe deposit boxes.
- Reflect Florida residence in all deeds and other documents, i.e., Wills, Trusts, Health Care Designations and Durable Powers of Attorney.
- Utilize Florida doctors, lawyers, CPAs, brokers, and other professionals.
- Always give Florida residence when registering at hotels or otherwise.
- Receive social security, pension, or other benefit payments at your Florida address.
- Reside in Florida for more than six months per year.
- Join religious, charitable and/or social organizations in Florida and change any former state club memberships to non-residency status.
- All insurance policies, such as life, health, property, auto, boat, umbrella, long-term health, and disability, should be endorsed to reflect the Florida address and should be written or serviced by Florida agents.
By Joseph L. Charles
Senior Vice President & Private Wealth Advisor, Trust