Florida offers more than sunshine. It also offers no state income tax, no state estate (death) tax, and strong asset protection laws. But, before you make the move, it’s a good idea to review how becoming a Florida resident may affect your estate plan – especially the three items below:
1. Florida Homestead Laws
Florida’s homestead rules provide some of the most significant tax savings and creditor protections in the United States but are subject to the following restrictions:
- The home must be your primary residence.
- You must establish Florida domicile (residency), which can depend on several factors.
- If you die owning a Florida homestead and you are survived by a spouse and/or minor child(ren), Florida law may limit how the residence and surrounding property can be left to others.
Tip: Ask a Florida-licensed attorney to review your Will and/or Trust to make sure your plan works with Florida’s homestead restrictions, particularly if you are married and/or have minor children.
2. Update Your Estate Planning Documents
Similar to other states, Florida has its own rules for estate planning documents.
- Florida restricts who can serve as Executor of your estate and as Trustee of certain trusts, such as Community Property Trusts.
- If you have a Florida Revocable Trust, many assets must be retitled into the name of the trust for it to work as intended.
- Banks and other institutions may be less familiar with out-of-state documents, which can lead to erroneous rejections or delays.
Tip: Have your Florida-licensed attorney confirm that the people you chose to serve as your fiduciaries are legally qualified and that your documents meet Florida’s signing requirements.
3. Review Insurance and Retirement Plan Strategies
When compared to states like Indiana and Kentucky, Florida’s legal environment offers unique advantages for insurance and retirement proceeds.
- Florida provides strong creditor protection for the cash value and death benefit of insurance policies, often exceeding protections in other states.
- There is no state income tax, so Social Security payments and retirement account distributions are not taxed at the state level.
Tip: Work with your Florida-licensed attorney and financial advisor to ensure your insurance and retirement strategies are adjusted for Florida’s favorable tax and asset protection laws.
Bottom Line: Moving to the sunshine state offers meaningful benefits but only if your estate plan is properly aligned with Florida law. A proactive review with a Florida-licensed estate planning attorney, along with your financial advisor, can help you avoid unintended issues and make the transition smoother for you and your loved ones.
