Estate planning in Florida is just like anywhere else with one exception. Many people in Florida, vacationers or snowbirds, own an additional property in Florida. They only use these properties for part of the year. When it comes to estate planning, steps must be taken to ensure that the home in Florida is disposed of in the proper manner. The focus is to avoid triggering income tax. As well as estate tax charges by your home state as well as the Florida government.
This is in addition to any concern you may have regarding the length of time you spend in the state of Florida. Maintaining your health insurance in your home state is another consideration. Also maintaining your home state or province from a tax perspective. There are lots of issues to consider and stay current with. We suggest a full investigation prior to making the decision to purchase property in any state other than your home state, especially Florida. Contact an expert and follow their advice to ensure that you minimize your taxes. Go into the deal with your eyes open.
Many Canadians own vacation property in Florida. They will be charged a higher tax rate when they sell the their home. As well as if the estate must sell the home for them. A good estate planner will help you plan the proper way to dispose of your property to minimize the income tax that will be paid. Even if you are planning to purchase a property in Florida as a vacation home this is something that you should take into consideration prior to purchasing the property. Work with an estate planning lawyer. Or at least get an opinion from one before you make your property purchase in Florida. this is really important if you are a snow bird.
A friend of ours has already purchased a Florida home as a vacation property. He has given no thought as to what the income tax impact will be when he sells the house. Or the need to dispose of it when he passes away. This is something that many people should plan for with regards to Florida estate planning.
In his opinion he does not really care, since he feels that he will not be alive to worry about it. In some ways this is true. However he may also want to make sure that his family is not unreasonably taxed. He may want to ensure they receive an inheritance that helps them in their time of need. Paying the maximum amount of tax to any government is not the way to do this. Planning ahead of time will help to ensure that your estate tax is minimized
Plans change all of the time. In my neighbors case now he has no plans to sell his property. However in 5 years time or 10 years time, he may be tired of going to Florida all of the time. He may want to find something that is different. Even health issues may prevent him from traveling and he will be forced to sell it while he is still alive.
Planning is key to ensure that your taxes are kept to a minimum. Meet with your tax adviser and financial accountants to ensure that your estate is planned properly to avoid paying too much tax.