Moving to Florida: Have You Really Left Your Old State Behind?

Relocating to Florida is a dream for many individuals and families seeking warm weather, favorable tax laws, and a fresh start.  But legally speaking, moving is more than changing your address.  Questions often arise about domicile, taxes, estate planning, and whether ties to your former state truly end once you cross state lines.

If you are considering a move to the Sunshine State, here are some key considerations to keep in mind.

Establishing Florida Domicile

To truly “move” to Florida, you must establish domicile, which is your permanent legal home.  You can have multiple residences, but only one domicile.  Your domicile determines which state’s laws govern your estate at death and whether your estate may be subject to state estate tax.

To establish Florida domicile, you should:

• Obtain a Florida driver’s license
• Register to vote in Florida
• File a Declaration of Domicile in the Florida county where you reside
• Update your mailing address with financial institutions and the IRS
• File for Florida’s homestead exemption (if eligible)
• Spend more than half the year in Florida
• Update your estate planning documents to Florida

Intent matters.  Courts look at objective and subjective evidence, as well as other factors, to determine where you truly live.  If you continue spending significant time in your former state or maintain strong ties there, that state may argue that you never truly left. 

For example, states like New York are known for aggressively auditing former residents who claim to have relocated.   If you maintain a home, business interests, or substantial time in New York, you may still be considered a statutory resident for tax purposes.

Are You Really “Divorced” from Your Former State?

The answer depends on whether you have effectively severed ties.

Even after declaring Florida residency, you may still face obligations in your former state if you:

• Maintain a residence there
• Spend more than the statutory number of days there (183 days per year)
• Operate a business there (especially a business that produces income in that state)
• Earn income sourced from that state

In high-tax states such as New York or California, residency audits are common.  States analyze factors such as where you keep your personal belongings, where your doctors and advisors are located, and even where your pets live.

If you fail to properly break residency, you may still owe state income tax.  In some cases, estate tax exposure may remain as well.

Could Your Former State Still Impose Estate Tax?

Florida does not impose a state estate tax.  That is one of its major advantages.  However, states such as New York have their own estate tax systems, separate from federal law.

If you are deemed domiciled in your former state at death, your entire estate could be subject to that state’s estate tax regime.

Even if you successfully establish Florida domicile, estate tax exposure in your former state may still arise if you:

• Own real property in your former state
• Hold certain business interests operating there

A comprehensive estate plan should address how multistate assets are structured, titled, and held.

Is Your Existing Revocable Trust Enough?

Many individuals moving to Florida already have a revocable trust in place.  The good news: a properly funded trust can avoid probate in Florida for assets titled in the trust’s name.

However, several issues often arise after relocation:

• The trust must be fully funded. Assets left outside the trust may still require probate.
• Out-of-state real estate may trigger ancillary probate. If you own real property in another state in your individual name at the time of your death, your estate may be required to open an ancillary probate proceeding in that state.  In most cases, properly transferring out-of-state property into your revocable trust is sufficient to avoid ancillary probate.  However, in certain jurisdictions, additional structuring, such as holding the property through an LLC (discussed below), may be advisable to further reduce probate risk or, at a minimum, simplify estate administration.  
• Homestead rules in Florida are unique. Florida has specific constitutional protections governing homestead property, which may impact how your primary residence passes at death.

Florida’s constitutional homestead protections affect how a primary residence may be devised at death.  An estate plan drafted in another state may not properly address these restrictions.

A trust created elsewhere is not automatically “wrong”, but it should be reviewed to ensure it functions as intended under Florida law.

Should You Use an LLC for Out-of-State Property?

Some individuals consider transferring out-of-state real estate into a limited liability company (LLC) as part of their estate planning strategy.

In certain cases, holding property through an LLC, with the membership interest owned by your revocable trust, can reduce the likelihood of ancillary probate in the state where the property is located.

However, this strategy must be evaluated carefully.  Transferring property to an LLC can:

• Affect property tax treatment
• Trigger lending issues
• Create unintended tax consequences

An LLC can be a useful estate planning and asset protection tool, but it must be integrated into a broader, coordinated plan.

The Importance of Coordinated Planning

Moving to Florida is both a lifestyle decision and a legal transition.  To protect yourself, you should:

• Clearly establish Florida domicile
• Minimize ongoing ties to your former state
• Review and update your estate planning documents
• Confirm that trusts are properly funded
• Evaluate whether restructuring the ownership of assets makes sense

Estate planning documents drafted in another state may remain valid in Florida, but they should be reviewed to account for Florida’s unique homestead, creditor protection, and probate rules.

A properly coordinated estate plan ensures that your relocation achieves its intended benefits, including minimizing taxes, avoiding unnecessary probate, and protecting your beneficiaries. 

Without careful planning, you may remain financially connected to your former state long after you think you have left.

If you are planning to relocate to Florida, or recently have, a coordinated review of your domicile status and estate plan is essential.  A proactive review today can prevent costly tax disputes and probate complications tomorrow.

Please call us at 561-626-2101 or toll-free at 800-226-1484 to speak with an estate planning attorney to discuss your planning needs and how we may help.