
Quitting New York
Two experts in domicile and probate law share tips on establishing residency in Florida while avoiding the long arm of New York tax authorities
The furniture is in place, the pictures are hung, and the boxes are unpacked in your new Florida home, but did you really leave New York? Not necessarily, according to tax authorities in the Empire State. It takes a lot more than a moving van and a one-way ticket to prove that youโre gone for good, and the consequences of not doing so can be expensive.
The question comes up more and more as an increasing number of people bid farewell to northeastern states like New York, New Jersey, Connecticut, and Massachusetts for the sun, space, and benign tax landscape of Florida. And the answer, particularly for high-net-worth individuals and families, can be complicated, according to Florida-based law partners and brothers John Raymond and Mark Raymond of Nelson Mullins Riley & Scarborough.
โEveryone assumes, โHey, I let the U.S. Postal Service know, now I live in Floridaโ,โ says Mark, a specialist in high-stakes commercial and probate litigation. โBut itโs not as simple as changing your address.โ
โNew York takes the position that you never really left New York,โ adds John, who concentrates his practice in income tax, estate, and gift tax matters. โIt is in your essence, and you must prove that you left.โ
Failing to cover your bases might leave the impression that the โessenceโ of your life remains in New York, where you plan to return after enjoying Floridaโs absence of state taxes for a few years. That might trigger a New York residency audit which could end up costing you millions in taxes to a state you thought you left behind for good.
If you havenโt updated your will since moving to Florida, for example, you risk having to endure expensive probate proceedings in New York and a hefty tax on your estate upon your death. John shared a story about someone who had lived in Florida for more than 12 years but hadnโt updated the will he made in New York 15 years ago.
โIf they had died with this document, what does it say? โI, blank, residing in the city, county, and state of New York, do make this last will and testamentโ? It is the single largest testimony that says, โI never left New York, please tax my estate.’ โ
Thatโs just one bullet on a checklist that experts like the Raymond brothers can guide you through to create a complete case for domicile in Florida. Others include filing a declaration of domicile for the Florida county in which you reside, registering to vote in Florida, getting a Florida driverโs license, enrolling your children in Florida schools, establishing a business in Florida, and registering your cars in Florida.
Even your bank and brokerage accountsโwhich work the same wherever you areโneed to move south.
โThere are hundreds of people in Miami worth $500 million and up, and if they left everything with Goldman Sachs New York, theyโve got a problem,โ says Mark. โGoldman Sachs has a new office in Miami, so reregister it there.โ
Auditors will focus on even the mundane details of life, such as the exact number of days you spend in each state and where you do your shopping.
โIf your body touches any part of the state of New York, thatโs considered a day in New York,โ cautions John, citing the importance of tracking your movements in a monthly planner or digital calendar. โIf you change planes on the way to Europe, thatโs a day in New York.โ
โNew York State might say, โLet me have your credit card statement,โโ Mark adds. โโOh, I see you went shopping at Bloomingdaleโs and the Apple store in Manhattan. That means youโre in New York Stateโ.โ
Ultimately, both experts recommend consulting a tax planner long before moving to make sure the โessenceโ of your life travels to Florida with you. But once all your financial ducks are in a row, what challenge remains for the new arrival? Fitting in, as always.
โDo you have someone who can be an anchor for you? Because itโs tough breaking into some of these communities if youโre a new resident,โ Mark notes. โYou may have been a big wheel in your temple, charity or community in New York, but you move down here and find we donโt have the same organic networks, we donโt have the same charities, and itโs a different group of people.โ
frank papandrea
Posted at 18:06h, 22 AprilGreat read
Gary Press
Posted at 18:50h, 22 AprilInteresting! So easy to forget some things. Things that can be quite costly.
Mark F. Raymond
Posted at 23:57h, 26 AprilThanks very much for the feedback and Gary thank you for the coverage