J. Kelly Kennedy, Attorney/CPA, PLLC

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Inheritance tax basics for part-time Florida residents

With autumn here and winter hard on its heels, many retirees will be making their way back to Winter Haven, Lakeland, and other communities throughout Florida. These snow birds who spend the summer months in northern states and then fly south to Florida for the winter truly do enjoy the best of both worlds in many ways. However, it's important to give due consideration to which state is one's legal residence, as the laws of that state will affect one's estate and assets.

Take, for example, the issue of the inheritance tax. Federal law allows individuals to pass along anything under $5.49 million to their heirs without incurring taxes. Anyone planning to hand down an inheritance of less than that amount will not need to worry about federal taxes. And the additional good news for Floridians is that this state does not impose an inheritance tax or an estate tax either.

However, those who reside in Florida for only half the year will want to take note of the estate and inheritance tax rates in their other home state as well. Many other states do levy inheritance and estate taxes, some with exemptions much lower than the federal level. The deciding factor in which state's laws apply to a snow bird's estate is, simply, where that person spent six months and one day out of the year.

In other words, people may own multiple properties in Florida and have all of their family members here, yet if they spent six months and one day in another state, that other state could take a significant bite out of their heirs' inheritance upon their death. A Florida attorney with experience in this field can help protect snow birds' estates and assets for their heirs.

Source: CBS Boston, "Snow Birds: Protecting Your Estate While Living in Two States," Dee Lee, Oct. 13, 2017

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