Tax and Estate Planning for Clients Relocating to FloridaTax Professionals' Resource
May 13, 2013 — 1,194 views
When you decide to relocate out-of-state, you are faced with a number of problems that must be settled at the outset to avoid hassles. So, you will need to file a Declaration of Domicile and get a new driver’s license. You will have to get your voting records struck off from the record in the previous state and you will need to file for homestead exemption. These are just a few essential things to do before relocating.
Establishing a Florida Domicile
When you file a declaration of Florida domicile, your signature is enough for proof that you are now a Florida resident. This document is filed through the clerk of the circuit court. The next step is to take the driver’s license for which you have 30 days. If you already have a DL, you will not be required to take a test – written or driving. But you need a set of documents like residence proof, old license, and your SS card to get the Florida state DL.
When you complete the estate planning, you have 10 days when you can get your car registered in the state. You will first need to get your car insured. The proof of policy and the original title are to be presented to the county tax collector. They should be presented along with the registration and other fees applicable in Florida. The other steps in the process include registering to vote, filing federal taxes, change or transfer memberships to churches, clubs, or banks.
Homestead laws in Florida are favorable to house owners. As per the homestead law, you and your heir cannot be evicted out of your home if you are a legitimate owner. Even if you are indebted to credit card companies, they can evict you or force you to sell your home. However, if you have used your house as collateral for securing loan, this protection will be inapplicable.
Florida is also an exception in comparison to the other states because you have full value claim (not partial claim) over the homestead. Additionally, you get an exemption of $25,000 over the appraised value of property for the purpose of taxation. You will be taxed on the appraised value minus $25,000, if you declare on the 1st of January in a calendar year that you have a legal title over the property--and you reside in the same property.
There are several other advantages of relocating to Florida. They do not currently have an inheritance tax. It is also one among the seven states that do not have state income tax. Before January 1, 2005 there was a sponge tax or pickup tax. This was the estate tax at the state level and it almost amounted to the federal estate tax. But this tax was phased out in Florida from 1st January of the year 2005 under the Tax Relief Reconciliation Act. Unlike many other states, the legislature here is prohibited from enacting estate tax at the level of the state. But there are other taxes such as intangible tax returns. Homestead owners in Florida also enjoy additional tax exemptions for widowers and widows.