The Good News provides a monthly column with important content having to do with topics from the legal community. This month, William “Bill” C. Davell and Marianna Seiler, of Tripp Scott PA, address residency.
Are you one of the 372,335 folks who relocated to our Sunshine State in the year ending June 30 – or planning to be one of the average of more than 800 arriving daily in coming years?
If so, you should know about the benefits to being an official Florida resident that extend beyond wonderful weather and a high quality of life to various kinds of preferential tax treatment to the ability to protect assets to in-state tuition benefits.
So let’s dive in.
Bill Davell: What does it even mean to be a resident of Florida?
Marianna Seiler: Interestingly enough, there is no single definition of what it means to be a Florida “resident” – the state Supreme Court has made it clear that the term is “quite dependent upon the purposes and goals of the statute in which the term is used.” The Florida Department of State reiterates, “There are no general rules for establishing residency in Florida. Residency is program specific. That is, it is attached to a specific purpose or need.”
“Domicile” is also used in different ways. According to the Court, “A ‘domicile’ is a person’s home. A person has a domicile at all times.” But in the same breath, the Court indicated that “‘domicile’ relates rather to the legal residence of a person, or his home in contemplation of law,” and that “in some contexts, ‘legal residency’ may be used in lieu of ‘domicile.’”
So two important principles arise: first, it’s important to understand the concepts of residency and/or domicile in the context of the purpose or benefit sought.
And second, in most instances, in determining eligibility for these benefits, the most important factor is demonstrating intent to make one’s home in the state.
BD: So what are some benefits that can be gained by Florida residency?
MS: Perhaps the most important benefit is the “homestead” property tax exemption.
This exemption can be sought if you 1) own property and 2) make it your “permanent residence” or the permanent residence of a dependent. The amount of the exemption is up to $50,000 of the appraised value of the property, with the first $25,000 applying to all property taxes, and the additional $25,000 applies to the assessed value between $50,000 and $75,000, but only for non-school taxes. You need to submit a homestead application to your county property appraiser.
A second tax benefit really isn’t determined under Florida law – the ability to avoid state income and inheritance taxes, which don’t exist here. If you have a presence in another state, especially involving gainful employment, that jurisdiction determines whether you are a resident for taxation purposes, and many have a requirement that you be fully present here for 183 days.
Another homestead-related benefit is the ability to protect assets, as your permanent residence has broad protection against legal collections. But so do a range of other assets including property owned jointly with a spouse as “tenants by the entirety” (which automatically covers most assets acquired during marriage), the wages of a qualified head of household, life insurance, many retirements and medical savings accounts, prepaid college plans, Social Security and disability income, and unemployment benefits.
Finally, a resident or dependents may qualify for in-state tuition and financial aid if 12 months of residency can be proved.
BD: So how do I establish that I am a permanent resident, or have been a resident for 12 months?
MS: Permanent residence is defined under Florida statutes as “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. A person may have only one permanent residence at a time….”
For property taxation purposes, the law says, “the intention to establish a permanent residence is a factual determination to be made by the county property appraiser,” and it is pretty safe for most purposes to use as the basis of the “relevant factors” the legislature has identified in making that determination:
(1) A sworn Declaration of Domicile filed with your county Clerk of the Courts – which is not determinative but only one piece of evidence to be considered.
(2) Evidence of children’s school registration
(3) Place of employment
(4) Termination of non-Florida residency
(5) Proof of voter registration…”
(6) A valid Florida driver’s license or identification card and evidence that out-of-state licenses have been relinquished of driver’s licenses from any other states.
(7) Vehicle registration
(8) Address on federal income tax filings
(9) Bank statements
(10) Utility payments.
Taking advantage of these and other benefits of Florida residency is part of smart estate, tax and asset protection planning, all areas in which Tripp Scott offers first-class specialists, whether your needs are simple and straightforward or complex and sophisticated. For more an assessment of how we can help you with residency and other planning issues, contact Marianna Seiler at [email protected] or 954-525-7500.
If you have any topics you think my be of interest to our readers, we encourage you to email us at [email protected].
Read more Ask Bill at: https://www.goodnewsfl.org/author/william-c-davell/