Snowbirds: residency, homestead, and estate planning in two states

Pick a state, then act like it

Snowbirds get into trouble by leaving the question open: a Florida homestead exemption, a New York driver's license, a will that recites the Connecticut address. Each state can then claim you. Decide which state is home and make every record agree.

If Florida is home

Follow the residency steps, file the Declaration of Domicile (Florida has a form of it written for people who keep a home in another state), and apply for the homestead exemption. Florida does not count your days, but your old state may: some states tax you as a resident if you keep a home there and spend more than 183 days there. Keep a calendar of where you sleep.

Do not claim a residency-based property tax break in the other state. Florida law denies the homestead exemption to anyone receiving or claiming one elsewhere.

If your old state is still home

You cannot claim the Florida homestead exemption, and your Florida home does not get the Save Our Homes cap. For taxes other than school taxes, its assessed value can rise by up to 10 percent a year under the cap for non-homestead residential property; for school taxes there is no cap.

When a nonresident dies owning Florida real estate in their own name, Florida requires a separate court proceeding here, called ancillary administration. Deeding the Florida property into a revocable trust while you are living generally avoids it.

The trap that surfaces after death

Suppose a snowbird claims the Florida homestead exemption for years, then the family probates the estate up north on the theory that the person lived there. Florida law tells the county property appraiser to record a tax lien against the Florida home for the exempted taxes of up to the prior 10 years, plus a 50 percent penalty for each year and 15 percent interest per year, unless a Florida court determines the person was a permanent Florida resident in those years.

The same back taxes, penalty, and interest apply during life if the property appraiser finds the exemption was improper. Consistency is the protection.

Renting your Florida home while you are away

Renting all or substantially all of a homestead abandons it for tax purposes. A seasonal rental only costs you the exemption if the home is rented for more than 30 days per calendar year for 2 consecutive years.

Documents that work in both states

Health care documents should name agents who can act in both places, with HIPAA authorizations broad enough for doctors in each state. Your powers of attorney should be accepted at the banks you actually use. And your trust should hold the real estate in both states, so neither one needs a probate proceeding.

Common questions

Can snowbirds get the Florida homestead exemption?

Only if Florida is their permanent residence, they own and live in the home on January 1, and they are not receiving or claiming a residency-based property tax benefit in another state.

Is there a 183-day rule in Florida?

Florida does not require a minimum number of days to be domiciled here. The 183-day rule belongs to some of the states people leave, which can tax you as a resident if you keep a home there and spend more than 183 days there.

What happens to my Florida condo when I die if I am not a Florida resident?

If it is in your own name, Florida generally requires an ancillary probate proceeding here in addition to the one in your home state. A revocable trust that holds the condo usually avoids that.

Can I rent my Florida home while I am up north and keep homestead?

A short seasonal rental is usually fine. Renting the home for more than 30 days per calendar year for 2 consecutive years abandons the homestead exemption.