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Financial Benefits of Living in Florida

Posted on: December 28th, 2013
Florida retirement planningFlorida is a top resort and retirement destination. As investments and part of retirement planning, many homes in Florida are second homes and the owners may reside out-of-state majority of the time. Individuals who have properties in multiple states are at an advantage and should review options with a Florida tax attorney. One does not need to physically spend most of their time at a particular home in order for that property to be considered a primary residence. 

Courts recognize a primary residence based on several factors. The courts review some of the following to establish an individual’s intent to make Florida their primary residence:
  • Voter registration
  • Motor vehicle titles and driver’s license
  • Federal income tax returns
  • Bank accounts
  • Mail forwarding and magazine subscriptions
  • Retaining of local professional services: Medical care, accountants, lawyers in Florida, etc.?
Why may Florida be an attractive choice as your primary residence?
  1. Homestead tax exemption. Homeowners must apply for this status. There are also asset protection benefits; according to the Florida Bar
    If you own the home you live in, your home is protected from all creditors except those holding a mortgage or lien on your residence. You can exempt or protect your home and up to one-half acre of land from any forced sale if you live in an incorporated area. This also applies to mobile homes. If you live in an unincorporated area, you can protect up to 160 acres as homestead property.
  2. Bonus homestead tax exemptions. If approved, individuals with disabilities in Florida, as well as widows and widowers, receive additional tax exemptions.
  3. No state income tax. All wages and earnings are exempt.
  4. No estate tax.
  5. Creditor protection. Florida offers significant protection from creditors. Assets are not automatically protected once an individual becomes a Florida resident. For example, annuities and inherited IRAs of Florida residents are exempt from creditor claims. However, if the individual acquired the annuities when they were an out-of-state resident and then relocated to Florida, they may be subject to claims under the former state’s legislation. An asset protection attorney can advise proper tools for effective preservation.

Homeowners should also consider the tax laws in other states where they own property. To help minimize taxes, a tax attorney can advise how to decide on an ideal primary residence, which may change your ultimate retirement plans. 
 
 
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