One of the pressing questions facing newcomers to the Sunshine State is “should I establish Florida residency and how do I simplify the process?” This is especially true for the many high-net-worth individuals who have flocked to Palm Beach and Martin Counties during and after the pandemic. For them, establishing Florida residency is paramount.

If you look at all the red tape involved and think, “do I really need to establish residency,” let me assure you, the answer is yes. The benefits of becoming a Florida resident are many, including not having to pay state income tax, estate tax, or inheritance tax. In addition, the state offers favorable property and trust laws.

So, how do you become an official Florida resident? There are the technical steps new arrivals need to take to establish residency, such as buying a home, getting a Florida driver’s license, filing a change-of-address form, and spending more than six months outside of your former state of residence. But sometimes that isn’t enough.

While Florida welcomes new residents and makes the process relatively painless, the fact is that when you’re moving from the Northeast or the Midwest or California, all of those states do their best to try to keep their high-net-worth taxpayers tied to their old place of residence. This is so the state can continue to collect income tax and eventually, the estate tax.

States outside Florida conduct comprehensive reviews for domicile audits, considering factors like the amount of time spent in the state, the location of your primary residence, and other related elements. Ultimately, it often comes down to where your personal connection lies, which is inherently subjective. One of the most compelling ways to demonstrate this connection is through your philanthropic commitments.

For example, if an individual retains a board seat back in their home state, goes back for regular meetings and directs their money toward that organization, well, that scenario could come back to haunt them. It could appear as though they really haven’t detached from their former home state.

That is why I suggest philanthropists consider re-directing their giving to where they now reside, that of course being Florida. And that always leads to the next series of questions: “I just moved here” and “Where do I even begin?”

In my experience, connecting my clients with the Community Foundation for Palm Beach and Martin Counties is the best next step. The Community Foundation is an organization with a 50-year history and a robust staff that can help with research and match individuals to the causes they are most passionate about. Take it from me, it can be an impossible task to sort through all the area’s nonprofits on your own.

There’s likely something on the palate at the Community Foundation, that new arrivals can connect with, quickly make a mark on the community, and ultimately leave a real legacy. And in the process, they are fulfilling a legal requirement. Donors are able to show that they didn’t just move physically, but they’ve moved their focus and their heart, if you will, to Florida because this is where they’re now invested.

So, on behalf of the Sunshine State, welcome to Florida and I hope you will consider supporting the local community and making a real impact right here in your new backyard.

_______________

James A. Ballerano is a Trust and Estate Partner at Day Pitney LLP, and a member of the Community Foundation for Palm Beach and Martin Counties’ Philanthropic Advisory Council (PAC). The PAC is a collaborative group of trusted advisors providing the Community Foundation with leadership and guidance to best serve our clients and the community. Learn more at yourcommunityfoundation.org.