Florida’s favorable laws affect others’ estate planning
Florida is often the subject of lighthearted jabs directed at the age of its residents. While it is certainly true that the state possesses its fair share of retirement communities, few outside the Sunshine State realize there are reasons, other than the sun, for why retirees are drawn to it.
One of the biggest reasons is estate planning. Florida’s favorable individual income tax scheme is coupled with its favorable estate tax administration. For those that acquire even a modest amount of assets, Florida’s laws can shield significant sums of money from governmental agencies and ensure loved ones receive more of their inheritance.
These laws, and the recognition that they actually cause some people to change their residence, have caused several states, including New York, to reconsider their own tax schemes. In the Empire State, regulators have lessened the tax consequences at death. The only problem, however, is the more favorable estate tax will not take effect for 5 to 8 years. In addition, to encouraging people to look after themselves until the new regulations take effect, these laws will create extremely challenging estate planning issues.
Anyone taking the time to plan for the distribution of their estate needs to recognize the potential for tax implications. Creating strategies to minimize one’s tax liabilities is hard enough with the current scheme. Sunset provisions and looming deadlines to tax holidays, however, make this planning a nightmare. The right answers become even more evasive when one considers that everything is subject to change at the whim of state legislators.
Removing the uncertainty, though, is possible. Local Lee County estate attorneys can help people understand the laws affecting them and the areas where uncertainty reigns. This knowledge can be critical in avoiding planning pitfalls. By understanding the local scheme, Floridians can ensure their desires are met no matter what the ever changing political climate dictates.
Source: The New York Times, “Live Longer and Heirs Will Prosper in New York,” April 18, 2104