Florida is among the most popular retirement destinations in the United States. The temperate weather, active lifestyle, and favorable tax climate are all major deciding factors to relocate to Florida from a northern state like Minnesota. Thousands of people pack up and move to become Florida residents every year. While this brings many benefits, there are also several complications to be aware of for those making this change.
Florida estate law may differ from the new resident’s state of origin, which may affect their estate plan. A Florida and Minnesota estate law attorney from Roulet Law Firm, P.A. can help clarify the differences in estate law to create a robust plan with more benefits. Consider scheduling a consultation today by calling (941) 909-4644 for the Florida office and (763) 420-5087 for the Minnesota office.
Are Out-of-State Wills Valid in Florida?
The first question on most people’s minds when considering estate planning in another state might be: is this out-of-state will even valid? The United States Constitution requires the states to give “full faith and credit” to the laws and codes of other states. This means that a will that is drafted legally in another state will still be valid in other states. For example, a will made before a Minnesota state resident relocated to Florida for retirement would still be valid in Florida. This is confirmed by the Florida Statutes 732.502.
However, each state has varying probate laws and processes that can differ wildly depending on the state. While an out-of-state will may be valid, there may be other in-state stipulations that apply, which may cause it to go through probate in an unintended or undesirable way. This is why updating wills and beneficiary designations is generally advisable when changing states of residence.
Create a Trust or Update Your Existing One
For many people moving to Florida, a trust may be a much better choice than relying on just a will; particularly those moving from states where probate may have been relatively quick and inexpensive. Florida’s probate is not quick and since the fees are statutorily fixed, can be expensive. Creating a trust and transferring your assets into it, allows you to bypass the probate process completely – saving your family time, money and stress.
Homes and Assets in Florida and Another State
If you are like many of the families we work with that still have a home “back up north”, you should seriously consider a trust. Otherwise, your family will have to go through the probate process in each state where you have assets; significantly increasing the costs, stress and delays. A fully-funded trust avoids the need for your family to go through probate in multiple states.
Update Your Trust to Florida Law
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While a trust created in another state may be valid in Florida, you should have it reviewed by a Florida-licensed attorney and make any updates that may be required. In particular, it is important that your trust contains specific provisions to comply with Florida’s homestead laws. If not, you risk losing your homestead protections for any property you put into your trust.
Beneficiary Designations
Establishing beneficiary designations is a key facet of estate planning, as these documents are considered contractual obligations and are exempt from the probate court process. Keeping these designations organized and in line with the testator’s desires can help ensure a smooth and effective estate distribution.
Avoiding Probate
One of the benefits of beneficiary designations is that assets divided in this way avoid the probate court system. This can apply to bank accounts, life insurance policies, investment property, a business, and many other assets.
By appointing beneficiaries of property and assets, the testator can ensure that their wishes are honored and potentially avoid the fees and expenses of the probate court. When moving to Florida, testators should ensure that their beneficiaries are clearly and accurately named for any asset that may require one.
Overriding Wills
While many people may consider updating wills when moving to a new state, fewer people know that beneficiary designations take precedence over a will. For example, if one child of the testator is specified as the beneficiary of a certain bank account but all of the testator’s children are listed in the will, the child named as beneficiary will inherit despite the terms of the will.
Therefore, when revising and updating an estate plan, it is important to consider and review all beneficiary designations to confirm that they agree with the last will.
Changing Beneficiaries
Updating or changing beneficiaries can be relatively painless, requiring only a few forms filled out to record the proper beneficiaries. However, according to the Florida Retirement System, there are multiple kinds of beneficiaries, and certain people may not be eligible to be named as beneficiaries. To learn more about the specifics of Minnesota and Florida estate law, consider speaking with an experienced estate law attorney from Roulet Law Firm, P.A.
Florida Estate Laws
In addition to designating beneficiaries, one may also consider updating wills to match the specific estate laws in Florida. Listed below are some of the more prominent Florida state laws to consider when updating wills.
Elective Share Rights
In Florida, a surviving spouse is automatically entitled to 30% of the testator’s assets on their death, which is called an elective share. This may cause trouble in situations where divorce and subsequent marriages are involved. The deceased may have written a will that bypasses the surviving spouse in favor of the children.
However, this may not be viable in Florida, as the elective share rights entitle the surviving spouse to their 30% despite the terms of the out-of-state will. When moving into Florida, it may be beneficial to update the wills in light of this state law.
Homestead Law
Another similar code is the Homestead Law, which requires a married testator to leave the homestead only to their spouse. If a testator tries to do otherwise, the law overrules their decision and provides the surviving spouse with a life estate regardless of the wishes of the deceased.
Taxation on Trust Income
However, there are also benefits to Florida’s estate laws. Many states impose a tax on trusts in their state, which includes the trusts that many people use for estate planning. This means that, after the testator’s death, the assets in the trusts may be taxed and the beneficiaries of the trust will receive less.
However, Florida does not impose these taxes on trusts, which can protect the assets stored therein. This law only applies to Florida residents, so it is important to ensure that as many documents as possible accurately list Florida as the state of residence. A state may be able to argue that a testator’s trust still owes taxes in their state because the will lists that state as their official residency.
Appointing Executors
Another concern to address when updating wills in Florida is the matter of executorship. Many people appoint executors who are family or close friends who live near them, which may come into conflict with Florida’s estate laws. Having an out-of-state executor can cause trouble in the Florida courts, and may not even be allowed unless that person is a legal relative.
If an executor does not meet the standards of Florida law, someone else may appointed that may not be well acquainted with the wishes of the deceased. Ensuring that the appointed executor of the will is eligible to serve in Florida may help avoid confusion and ensure the proper distribution of assets.
Establishing Residency
Another concern to address is establishing residency for tax purposes. One of the reasons many people are moving to Florida is its favorable tax climate. However, just because you move here does not mean that your previous state of residence may not attempt to continue treating you as a resident for tax purposes.
One factor that many state revenue departments consider when determining whether or not you should still pay taxes to them despite your move to Florida, is which state’s laws your estate planning documents operate under. By updating everything to operate under Florida law, you are putting another factor in your favor if your old state challenges your move for tax purposes.
Frequently Asked Questions
Listed below are some frequently asked questions about beneficiary designations and updating wills.
Should I Update My Will When Moving to Florida?
Updating wills is generally advisable when moving to Florida, as the specific state laws may work counter to the wishes of the testator.
What Needs to Be Updated About My Will?
You may need to update the executor and trustee agreements in Florida, adjust for Florida’s tax laws, and ensure that your will complies with Homestead Law. Also, having your documents operate under Florida law, rather than the law of your previous state of residence, can be a factor in your favor for establishing residency for tax purposes.
Should I Update My Trust When Moving to Florida?
Updating your trust is generally advisable when moving to Florida, as the specific state laws may work counter to the wishes of the testator.
What Needs to Be Updated About My Trust?
You may need to update the executor and trustee agreements in Florida, adjust for Florida’s tax laws, and ensure that your trust complies with Florida’s Homestead Law. Also, having your documents operate under Florida law, rather than the law of your previous state of residence, can be a factor in your favor for establishing residency for tax purposes.
Contact a Minnesota and Florida Estate Attorney Today
For those considering leaving Minnesota to retire in Florida, taking advantage of the warmer climate, tax benefits, and living conditions, updating wills, trusts and revising beneficiary designations may be worthwhile. A skilled estate law attorney from Roulet Law Firm, P.A. can help to navigate through the complexities of state laws to draft a solid and effective estate plan. Consider scheduling a consultation by calling (941) 909-4644 for the Florida office and (763) 420-5087 for the Minnesota office or you can fill out the contact form on this page and a member of our team will contact you to schedule a consultation.
Or if you are not yet ready to schedule a consultation and would like additional information, click here to sign up for our online masterclass where I reveal strategies I use with my private clients and their families to avoid probate, minimize or avoid estate taxes, protect the money they leave for their kids from divorce and much more.
