Thinking of Moving to Florida?

Published: January 25, 2023

Tax considerations (and colder weather) may have you considering a move to a warmer climate. Along with its mild weather, Florida also has the added benefits of having no state income tax and robust asset protection laws. However, before you pack your bags, there are several factors to consider if you are contemplating becoming a Florida resident. Depending on what you are trying to accomplish, requirements for establishing Florida residency vary, and Klingenstein Fields Advisors (KF Advisors) can work with your legal and tax advisors to determine the best plan for your circumstances.

Residency for tax purposes

Florida has no state income tax, making it an attractive state to establish residency. If you have a second residence elsewhere, your original state of residency, of course, would prefer that you remain its resident for income tax purposes. Each state has unique rules for qualifying as a resident of another state for income tax purposes and typically require that you live in the other state for more than six months of the year. However, determining residency can get tricky and states often aggressively contest changes of domicile.

For example, under New York law, if you are in the state for even part of the day, it is considered a “New York Day,” even if you don’t spend a night there. So, if you leave Florida in the morning, spend part of the day in New York, and fly back that night, you have legally spent the day in New York.

While establishing residency under Florida law is simple and straightforward, the real challenge is proving to New York that an individual is no longer a New York resident. Domicile is a legal term of art where one must prove not only their residency but also their intent to make that state their fixed and permanent home. A person can have only one domicile but can maintain multiple residences.

Residency for asset protection

Florida asset protection laws are generally favorable to property owners. To qualify as a resident for asset protection purposes in Florida, you must prove you are “domiciled” in Florida by demonstrating your intent to maintain your primary residence in Florida or, as Florida law defines a permanent residence, “that place where a person has his or her true, fixed, and permanent home and principal establishment to which, whenever absent, he or she has the intention of returning.”

Several actions demonstrate that you have established Florida domicile for income tax and asset protection purposes. One is a formal declaration of domicile, a voluntary filing in the public records which attests to an individual’s intent to make Florida his or her permanent home. There are also a number of additional actions that may help reinforce your intent to make Florida your permanent home and provide useful documentation, which could include the following:

  • If you own your home, apply for the Florida homestead exemption in the county of residence. The Florida homestead exemption provides asset protection benefits to homeowners, a reduction in property taxes, and serves as great evidence in support of Florida residency.
  • Maintain a physical mailing address (not a P.O. box).
  • Work for an employer located in Florida.
  • Provide proof of payment of utility bills for the location where “permanent residency is being claimed.”
  • Use a Florida address on all legal paperwork, including federal income tax returns.
  • Change your driver’s license, passport, and voter registration to your Florida address.
  • Notify governmental agencies of your new address, including Social Security and Medicare.
  • Physically move some valuable household items, such as artwork or jewelry, to your Florida home.
  • Notify professionals, such as your attorneys, accountants, banks, and insurance carriers, that your primary residence is in Florida. (For professionals moving to Florida, ensure that you are licensed to practice in Florida.)
  • Change your primary care physician to a local Florida physician and change your pet’s veterinarian to one in Florida (this was an actual determining factor in a legal case).
  • If practical, sell any real estate in the previous state of residence.
  • Update your will and ancillary documents (e.g., healthcare directive, living will) to reflect your Florida residence.

A change in primary residence can be a complex issue. Our team at KF Advisors possesses on-the-ground knowledge of the considerations involved in establishing Florida as your primary residence and can work with you and your legal and tax advisors to identify the most appropriate solution for your situation. We encourage you to contact us directly by phone at 212.492.7000 or email us at info@klingenstein.com. In addition, you’ll find News and Insights on our website and educational webinars on a variety of financial topics on our YouTube channel. And please don’t forget to follow us on LinkedInInstagram, and Twitter.

Important Disclosures

This material is provided for informational or educational purposes only and should not be construed as investment, accounting, tax or legal advice. Always consult a financial, tax and/or legal professional regarding your specific situation. This communication is not intended as a recommendation or as investment advice of any kind. It is not provided in a fiduciary capacity and may not be relied upon for or in connection with the making of investment decisions. Nothing herein constitutes or should be construed as an offering of advisory services or an offer to sell or a solicitation to buy any securities or a recommendation to invest in any specific investment strategy. Investing involves risk, including the possible loss of principal. Past performance is not indicative of future returns. The views expressed herein are as of a particular point in time and are subject to change without notice. The information and opinions presented herein are general in nature and have been obtained from, or are based on, sources believed by Klingenstein Fields Advisors (“KF Advisors’) to be reliable, but KF Advisors makes no representation as to their accuracy or completeness. Although the information provided is carefully reviewed, KF Advisors cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided. KF Advisors represents two investment advisers registered with the Securities and Exchange Commission: Klingenstein, Fields & Co., L.P. and KF Group, LP. If you are a KF Advisors client, please remember that it remains your responsibility to advise KF Advisors, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services.