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Understanding the implications of a move to Florida

Frequently asked questions

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If you are thinking about a move to Florida, you will want to review your wealth and estate plan to make sure you understand the landscape of items that could be impacted by moving to a new state – from income tax implications, to updating your last will and testament to your power of attorney and medical proxies. The FAQs below, will help you get started:

Frequently asked questions (FAQs)

 

If I change my domicile to Florida, can my income after the move still be taxed in my prior state?

Yes. Even if you establish Florida as your domicile, you can be subject to income tax in another state if you: (1) spend too much time in another state or (2) have so-called “source income” from that state. For example, if you sell tangible personal property or real estate in your former state, income from that sale could be taxable in that state regardless of how many days you spent there.

Will Florida recognize my last will and testament that was executed in another state?

Florida will recognize your last will and testament from another state if it was valid under the laws of that state on the date it was executed. However, if you’re using a traditional last will and testament from another state, you may want to replace it with a Florida will and also establish a Florida revocable trust (or “living trust”) to minimize or avoid Florida probate as well as to help support your claim that you are domiciled in Florida.

Who can serve as my personal representative (many other states use the term Executor) under my last will and testament in Florida?

Your personal representative can be:

  • Any family member (a spouse, sibling, parent, child or other close relative) who is at least 18 years of age and who is legally competent
  • A non-family member who is at least 18 years of age, legally competent and claims Florida as their domicile
  • Any trust company or bank that is qualified to do business as a corporate fiduciary in the state of Florida
  • Bank of America, N.A., which is authorized to serve as a personal representative in Florida

 

If I pass away after moving to Florida, can I still be subject to probate in my former state?

Yes. If you own real estate (or certain tangible personal property) in your former state at the time of your death, that property can be subject to that state’s probate procedures. Probate in another state is called “ancillary probate.” It can be burdensome and expensive as well as create delays in passing assets to your beneficiaries. There are several techniques you can use to avoid ancillary probate, including recording a transfer-on-death deed with your former state (if permitted under the laws of that state), holding the real estate inside your revocable trust, and wrapping the real estate inside an entity like a limited liability company (LLC).

Will medical practitioners recognize my advance directives (such as a living will and health care surrogate form) that were executed in another state?

In theory, yes. In reality, “perhaps.” Health providers in Florida are used to operating under the Florida statutory versions of these documents. Unfortunately, they could misconstrue documents from another state or simply refuse to recognize them for fear of engaging in unauthorized medical treatments. We generally recommend that you use the Florida versions of these forms, which are available at The Florida Bar website.

Will Florida recognize my durable power of attorney that was executed in another state?

Perhaps. Florida does not permit so-called “springing powers of attorney” executed after October 1, 2011. A springing power only takes effect if the principal (that is, you) becomes incapacitated. In addition, the Florida statute requires that a power of attorney be notarized and signed by two witnesses for certain proceedings like real estate transactions. It may be that your durable power of attorney from another state required only a notary seal and therefore can’t be used for real estate transactions. We recommend that you have a Florida lawyer review your existing durable power of attorney to determine whether it’s adequate under Florida law.

Who can serve as my agent under a Florida durable power of attorney?

Any competent person 18 years of age or older can serve as your agent (they do not need to live in Florida). However, from a practical standpoint it is generally beneficial if your agent lives in Florida (or at least in your time zone), is your age or younger and speaks English fluently.

Who can serve as trustee for trusts that I establish?

Your trustee can be any person who is at least 18 years of age and legally competent (they don’t need to live in Florida), or any trust company or bank that is qualified to act as a corporate fiduciary in Florida.

Bank of America, N.A. is authorized to serve as a trustee in Florida.

If I established an irrevocable non-grantor trust in another state, or if such a trust was created on my behalf in another state, will it continue to be subject to that state’s income taxes?

It might. Every state has its own rules regarding the taxation of trusts. Some look at whether the trust was established under a last will in that state (called a “testamentary trust”). Other states look at the location of the trustee, the beneficiaries, the location of the trust’s assets and/or the principal place of administration. Like an individual, a trust can have income sourced to a particular state even if the trust is a taxpayer of a different state. For instance, rental income from real estate will be sourced to the state where the property is located.

A member of your Private Bank team, tax advisor and/or estate attorney can help you evaluate your particular situation and determine next steps.

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