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MAKING FLORIDA YOUR DOMICILE
While a person may have more than one
residence, theoretically a person may have only one domicile.
The process of establishing a Florida domicile can be complex as
well as elusive. Many individuals are under the mistaken
impression that if they purchase a home in Florida and send out
address change cards they are officially Florida residents and have
fulfilled all the requirements for relinquishing residency in their
former state, however, many more steps need to be taken.
Establishing a Florida domicile can be obtained by choice, however,
two necessary elements must be met. First, there must be
physical presence which can be met by owing or leasing a residence
in Florida. The more permanent the relationship is with
Florida the stronger a case can be made. The second element,
"intent" is subjective. The burden of proof is on the person
declaring domicile to show that Florida is the center of the
person's social, economic as well as civic activity.
In many instances the issue is not the steps an individual has taken
to become a Florida resident, but rather the steps that an
individual has take to divorce him or himself from their northern
abode. Many northern states have lost substantial sums of both
income tax as well as estate and revenue as a direct result of part
time Florida residents declaring Florida their domicile.
Accordingly. many states have established criteria placing the
burden of proof on the party declaring Florida as their domicile.
At a minimum it is strongly recommended that the following steps be
taken if an individual with two residences seeks to declare Florida
their domicile.
A) File Declaration of Domicile with the Clerk of Court in the
Florida county where one resides.
B) Obtain Florida drivers license, Florida vehicle registration and
voters registration card.
C) If you own property in Florida, file for a Homestead Exemption in
the county in which you reside.
D) Transfer securities, bank accounts, brokerage accounts and
similar investments to institutions located in Florida.
E) Transfer valuables from safety deposit boxes in the former state
to a safety deposit in Florida. (Courts have held the location
of a person's safety deposit to be a critical factor in determining
domicile).
F) Establish wills, trusts, health care declarations and durable
powers of attorney which recite Florida domicile.
G) Change affiliations with religious and social organizations to
Florida and seek to request non-resident status with organizations
maintained in the former state of domicile.
H) Transfer family possessions, heirlooms and collections to the
residence in Florida since it is assumed those items would be kept
at a permanent home.
I) File the Federal Income Tax showing Florida as your address and
affirmatively state on your last return in your former state that it
was you final return for that state. It is beneficial to
notify the Internal Revenue Service by certified mail that you have
changed your address.
J) File Florida Intangible Personal Property Tax returns by June
30th.
K) Change addresses for credit cards, charge accounts, corporations
partnerships to your Florida address.
L) Establish relationships with Florida doctors, attorneys,
accountants, and insurance agents.
M) Make sure that you spend more than six months away from your
residence up north and seek to be able to document the time spent in
Florida id need be through a travel log and/or charge receipts.
N) Direct that paychecks, interest and dividend checks be mailed to
Florida.
The key issue is that northern states look beyond whether Florida
domicile has been declared and look directly to see if the client
has effectively abandoned their northern domicile. As a
result, it has become increasingly complex to defensively plan to
limit or avoid exposure to income tax and estate tax laws of
northern states. In many instances red flags are raised at the
time of death of Florida residents who otherwise own northern
property.
Seeking to localize a Florida resident's affairs through various
instruments may effectively reduce the possibility that an estate
tax will be claimed. Suggestions include: Revocable Trusts,
Limited Liability Companies, Irrevocable Trusts, and Offshore
Trusts. In these circumstances the northern real property may
be reduced to personal property held and owned in the state of
Florida, thereby eliminating the need for tax clearance letters from
the northern state.
In summary, careful planning must be given including spousal rights
for new residents seeking to declare Florida their domicile.
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