RETAINING DOMICILE IN FLORIDA WHILE LIVING TEMPORARILY IN ANOTHER STATE

ZERO STATE INCOME TAX AND NO STATE ESTATE TAX MAKES FLORIDA THE IDEAL STATE TO LIVE IN. NO WONDER THE SNOWBIRDS FLOCK TO OUR SUNSHINE STATE- JUST LOOK AT FLORIDA’S HOMESTEAD EXEMPTION!

There is a difference between “residence” and “domicile.” A person can only have one domicile, but more than one residence in different states. So what is domicile? It is defined as actual residence within a particular state with the intention of making that state one’s permanent home. Its really comes down to a factual finding of the intent of a person to make a particular state his or her domicile.

Pursuant to Florida Statute §222.17, a person can show intent to maintain a Florida residence as a permanent home by filing a sworn Declaration of Domicile with the clerk of the circuit court. Florida Statutes also provide some factors that manifest intent to retain Florida as a primary residence.

Ways to retain or establish domicile in Florida and take advantage of all its benefits is to purchase real estate in the Sunshine State. One should register to vote in Florida and vote at the next possible election. One should keep his or her Florida driver’s license and plates. Having your will/trust drafted to comply with Florida law stating your domicile in Florida also evinces intent. It’s important to spend a significantly greater portion of each year in Florida by being physically present in the state.

Finally, one should also consider establishing certain relationships with the state of Florida. Banking, religious, social, professional and medical relationships are more than a few examples. Also, keep your personal mailing address as a Florida address.

Calling Florida your “home sweet home” allows you to take advantage of the state’s asset protection laws.

MAXIMIZE FINANCIAL AID THROUGH THE USE OF AN IRREVOCABLE TRUST

A strategic estate planning tool that you may want to consider is creating an irrevocable trust for child’s college fund. Funds transferred to an irrevocable trust remain subject to trust terms and conditions until the established time for distribution. A trust can protect your child’s college fund from creditor’s demands. Also, an irrevocable trust has its own tax ID number and is not considered an asset when calculating your taxes thus providing certain tax benefits. Trust property is excluded from the trustor’s gross estate for federal tax purposes.

Additionally, a trust does not go through probate. Therefore, if a child needs money for school, she can access the funds immediately in the event of your death without being subjected to a lengthy and costly court process. Furthermore, a trust can be set up with restrictions regarding how and when your money will be distributed to your child.

How your trust is drafted and reported on FAFSA dictates the eligibility of your child for need-based financial aid. A common error is reporting the full value of the trust fund when there are proportional shares of ownership in the trust. Also, a typical mistake families make is reporting trust fund amounts incorrectly when ownership of the income and principal from the trust fund are split.

You should consult with your qualified and experienced South Florida estate planning attorney to review the terms of your existing trust to advise you as to what your options are under your trust or draft one for you to meet your objectives concerning your child’s educational needs and goals.

COLLEGE BOUND KIDS- EXPECT THE UNEXPECTED!

So your child has officially become an adult and ready to embark on a new journey- college! Congratulations! This is a huge milestone in your teenager’s life as well as a time of pride and concern for you as a loving parent. Your child is about to spread his or her wings leaving the family nest of security and safety.

What you need are eyes of a hawk in establishing a solid plan that will safeguard your teenager against any unexpected event that could place them in medical or financial peril. There are legal documents that should be prepared by a professional South Florida estate planning attorney who is familiar with the goals you wish to accomplish for your family. Your legal eagle understands the importance of a healthcare surrogate, durable power of attorney, and a living will.

The designation of a health care surrogate authorizes you to get information from a hospital or a doctor about your child. You will not be able to obtain this information once your child is 18 years old unless you have a document permitting you to do so. In addition, your child may be unconscious and unable to give permission. Florida’s HIPPA laws prevent the dissemination of medical information to others unless there are written directives authorizing the permission.

A durable power of attorney is an agreement that allows you to control your child’s financial needs. It can be drafted to allow you to access your child’s bank account in case you need to pay his or her bills, restrict spending, or replenish the account.

A living will is a document that a person uses to make known her desires regarding life-sustaining treatments. Although not the most palatable of topics, it will give you peace of mind with medical decisions you may have to make for your child in the event of an untimely illness or accident.

ESTATE PLANNING UPDATES: NOT JUST “SET IT AND FORGET IT”

Over 70 percent of all Americans have no estate planning documents whatsoever. Of the 30 percent that do, most have only basic documents like a Last Will and Testament, with no regard to probate avoidance, estate tax reduction or asset protection. Of those people that do incorporate a Revocable Living Trust into their foundational estate plan, over 90 percent will leave the trust underfunded or unfunded at death, causing the unnecessary loss of assets and unnecessary delay of distribution. Some basic estate planning upkeep could alleviate all of these concerns.

Your estate plan should be reviewed with an attorney at least once every 3 to 5 years. I review my clients’ estate plans each year to determine if any changes need to be made due to a change in tax law (as happened in 2010), legal drafting requirements (as happened in 2005) or the Probate Code (as happens most years). However, the more pressing changes almost always occur on the personal side of the equation.

Over the course of every 5 year period, most families will see a birth, a death, a marriage or a divorce and this event could cause the need for an amendment to the estate plans of the individual members of that family. Additionally, the beneficiaries might be at different ages or competency levels and the Trustees, Personal Representatives and Guardians might be in different stages in life, areas of the country or financial levels than they were when you originally drafted your plan, which would cause the immediate need to revise and choose new role players.

Another consideration is the age of your attorney. Your estate planning attorney needs to be able to walk your children or other beneficiaries through the administration process. Is your attorney still alive? Is he still practicing? Will he still be practicing when you die? Does he practice in the state in which you currently live?

Any estate planning attorney should give you a free consultation for the review of your estate plan. An ounce of prevention is worth a pound of cure. A simple review and possible amendment to your estate plan today will save your family large amounts of money and time after you are gone

THE NEED FOR A PROPER BUSINESS STRUCTURE

There are a variety of business entities that can be incorporated into your wealth preservation plan. A Limited Liability Company (LLC) is a commonly used structure that provides its “members” (owners) with control over assets, without the risks associated with having title in their own personal names.

By owning your assets in an LLC, you are safeguarding them from being pulled into a lawsuit brought against you, as you do not “own” them. The LLC provides higher liability protection than a corporation and, if organized correctly, any potential creditor or litigant would be limited to gaining only a charging lien against the LLC. Your home and other assets (bank account, etc.) may not be touched, because you do not own the business directly, thus you are not personally liable. It’s like being a stockholder in a corporation.

Due to the fact that there are several requirements to properly forming an LLC, you will want to seek an attorney (that has a thorough understanding of such asset protection) to assist you in ensuring that the LLC is valid; otherwise, your safeguarding efforts will be futile. Also, keep in mind, the timing of the asset transfer cannot be done to actively avoid a present creditor, as it may be considered a “fraudulent conveyance.” Therefore, it is important to partake in these asset protection strategies prior to any legal or financial problems.

By utilizing estate-planning techniques, you can protect yourself and your family from unnecessary hassles, while safeguarding your assets. With the help of an estate-planning attorney, there are a variety of tools that can be customized to your goals, and implemented to ensure that you get to enjoy your assets and investments without that pesky law suit target that comes when you own them in your own name.