Florida has several advantages that attract many people to live in the state, such as no state income tax, warm year-round weather, and a reasonably priced cost of living. In this article, you will find an overview of the key estate planning topics for new Florida residents.
Estate Planning for New Florida Residents – Taking a Closer Look
When moving to Florida, new residents who own their primary residence within state jurisdiction may be eligible for the Homestead Exemption and Save Our Homes assessment limitation.
The homestead property exemption permits eligible homeowners in Florida to pay reduced property taxes. Once a Florida homeowner is entitled to homestead exemption, there is a limit on the taxable value of the property.
The limit is referred to as the “Save Our Homes” cap. Considering the amount paid for a property’s taxable value may increase annually, it provides a significant reduction for homestead owners.
Please note that new Florida residents are not eligible for either of these programs if they are claiming homestead property tax benefits in another state.
Transferring Florida Homestead Property
Florida Constitution Article X, Section 4 details homestead exemption benefits within state jurisdiction. As provided by Section 4 (2)(b), “these exemptions shall inure to the surviving spouse or heirs of the owner.”
Section 4 (2)(c) specifies that “the homestead shall not be subject to devise if the owner is survived by spouse or minor child, except the homestead may be devised to the owner’s spouse if there be no minor child.”
Additionally, “the owner of homestead real estate, joined by the spouse if married, may alienate the homestead by mortgage, sale or gift and, if married, may by deed transfer the title to an estate by the entirety with the spouse. If the owner or spouse is incompetent, the method of alienation or encumbrance shall be as provided by law.”
In certain circumstances, it is possible to transfer Florida homestead property to a trust. Consult with an expert attorney to identify the best approach for your case, as homestead property is a complex subject in Florida estate planning.
Last Wills vs. Trusts in Florida
Florida law has specific statutory rules governing the execution of last wills and trusts. Florida Statutes Chapter 732 details all the aspects related to wills, while Chapter 736 encompasses the state’s Trust Code.
If a trust was created in another jurisdiction, the trust is valid within Florida’s jurisdiction if it complies with the state legal requirements. Florida trusts are not subject to income tax, which incentivizes many trust owners to relocate the trust’s “situs” (tax jurisdiction) to the Sunshine State.
Please note that a personal representative (last will) or trustee (trust) is only eligible if the person designated for the role meets the state legal requirements.
Entities named as personal representatives must also be qualified to exercise fiduciary powers in the state to meet the basic eligibility criteria and receive authorization to execute a deceased person’s estate. The same rules apply to entities named as trustees.
Florida estate planning encompasses a variety of legal tools such as powers of attorney (POAs), living wills, healthcare surrogates, and other similar strategies. Consult with an experienced Florida attorney to design a solid estate plan tailored to your personal needs and purposes.