Beyond The Will, Client Compass

Escaping the Snow: Estate Planning Considerations for Moving to the Sunshine State

July 20, 2023


Despite the unusual rain this year, New England is typically a great place to be in the summer. However, once the cold air moves in, countless people escape the harsh winters of New England by living half of the year in warm, sunny Florida. But owning property in Florida or potentially establishing your residence there can have countless implications when it comes to your estate plan. This article will give a general overview of the different estate planning considerations that come with “snowbirding” from Massachusetts to Florida.

Where Do You Call Home?

Establishing your residence in a particular state is an extremely important decision when splitting time between two states. The state you call home, or establish your residence in, is where you will be registered to vote, hold your driver’s license, be taxed, and receive public or government benefits.

Both Massachusetts and Florida follow the “183-day” rule. To be considered a resident of either state, you must live there for 183 days, roughly six months and a day. The 183-day rule is common across the United States, although some states require more or less days. It is important to note that any part of a day counts as a full day under this rule. If you just visit a friend for a few hours or are there on business, that time still counts towards the 183 days, exposing you to tax liability in multiple states.

Establishing your residence in one state is important for estate planning purposes, but it is also necessary to consider where you will own property, such as real estate. Any property physically located in a particular state will be subject to that state’s laws, regulations, taxes, and probate process, as discussed below.

Taxes, Taxes, Taxes

Unfortunately, regardless of warm or cold weather, taxes follow you around the country. Aside from the income tax liability that comes from changing residency or being a dual resident, estate tax implications must be carefully considered. Every state has different estate tax exemptions and rules, and your estate will only be subject to the estate tax where you were a resident or where you own property.

Massachusetts has a $1 million estate tax exemption and filing threshold. This means that any estate valued over $1 million is subject to estate taxes in Massachusetts and requires the Personal Representative to file an estate tax return. There are discussions currently in the legislature to increase the exemption to $2 million, but there is no date set for when this would come into effect.

Florida, on the other hand, has no estate tax. However, residents of Florida and Massachusetts (or any state) are subject to federal estate taxes. The current exclusion for federal estate taxes is $12.92 million per person, so any estate valued under $12.92 million is not subject to federal estate taxes. However, this exemption is set to be reduced to approximately $5 million per person in 2026.

When “snowbirds” own property in Florida and Massachusetts, there is a chance that they could still be subject to Massachusetts and federal estate taxes, even if they are Florida residents. For example, if you own a $1.5 million summer home in Massachusetts but spend seven months of the year in Florida, your estate would still be subject to Massachusetts estate tax for the property physically located in Massachusetts. Furthermore, if the rest of your property located in Florida is over $12.92 million, your estate would also be subject to federal estate taxes.

Probate Here, There, and Everywhere

Probate is the processing of filing your death certificate and various petitions to ask the court to assist in distributing your belongings to your loved ones. It can take months, or even years, depending on the size of your estate. Each state has its own laws and procedures for the probate process, and your estate will be filed in the probate court in the county where you live.

If you die while owning property in another state other than your resident state, your estate may have to open an additional probate proceeding in the other state. This is known as an “ancillary probate.” Typically, this is less formal and time-consuming than a full probate administration as it is only being filed for the particular property owned in your county

However, not all property is automatically subject to the probate process. Only property owned in your individual name at death must be probated. Therefore, it is often best practice for snowbirds to establish Revocable Trusts to hold title for their out-of-state property to their estate will not be required to file an ancillary probate.

As you can see, there are many different aspects of your property and estate plan that must be considered if you want to change your residence to the Sunshine State. The coming articles will take a deeper dive into these issues, and more, in the months to come!

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