Now more than ever, people are contemplating changing their state residency. We are frequently approached by clients seeking to relocate to Florida for financial reasons but they do not always understand the financial benefits or the process of establishing Florida residency. To help you decide whether a permanent move from New Jersey to Florida is right for you, this article explores the benefits that Florida residents enjoy, the process of becoming a Florida resident and the costs associated therewith.
The following chart illustrates the differences between the state laws in New Jersey and Florida.
Establishing Florida Residency
The starting point toward establishing Florida residency is physical presence. Once you extinguish your New Jersey domicile and begin living in Florida with an intent to remain in Florida, you may be deemed a permanent Florida resident. However, the Florida Department of Revenue (“Department”) has final discretion over Florida residency issues. Among many other factors, the Department will generally consider:
- A formal declaration of domicile by a homestead applicant recorded in the public records of the county in which residency is sought;
- evidence of the location in which a homestead applicant’s dependent children attend school;
- a homestead applicant’s place of employment; and
- proof of Florida voter registration.
The documents required to prove domicile are often also required to establish homestead and to receive property tax exemptions in Florida. However, while the Department assesses a homestead applicant’s permanent place of residency, applicants living in Florida may remain subject to New Jersey taxes. As such, it is advisable to consult with an attorney prior to establishing Florida residency.
Costs of Establishing Florida Residency
A common cost incident to becoming a permanent Florida resident arises from transferring vehicle titles from New Jersey to Florida. Under Florida law, to establish Florida residency, an individual must obtain a Florida driver’s license and complete Florida title and registration for all vehicles and boats that are transferred to Florida. Vehicle and boat transfers also require updates to insurance policies and physical inspection of vehicle identification numbers by the Florida Department of Motor Vehicles. After a Florida driver’s license is obtained, a New Jersey license is no longer valid.
Individuals seeking to establish Florida residency should also consider signing new estate planning documents, such as wills, trusts, durable powers of attorney and advance health care directives. Estate planning documents that are properly executed in accordance with New Jersey laws are enforceable and honored in Florida but it is advisable to sign new estate planning documents that comply with Florida law to demonstrate an intent to remain a permanent Florida resident.
Florida is receiving an influx of new residents which places additional strain on the State’s ability to process permanent residency applications especially during this pandemic. Your ability to take advantage of Florida residency benefits is primarily contingent upon satisfaction of Florida’s extensive procedural and technical requirements.
Michael Salad is a partner in Cooper Levenson’s Business & Tax practice group. He concentrates his practice on estate planning, business transactions, mergers and acquisitions, tax matters and probate administration. Michael regularly counsels clients with dual residency in the Northeast and Florida and actively travels between the Northeast and Florida. Michael holds an LL.M. in Estate Planning and Elder Law. Michael is licensed to practice law in New Jersey, Florida, New York, Pennsylvania, Maryland and the District of Columbia.
Craig Panholzer is an associate in Cooper Levenson’s Business & Tax practice group in its Florida office. He concentrates his practice on business transactions, cyber risk management, estate planning, probate and tax matters.