With winter upon us, many Wisconsin residents have already escaped to Florida. Perhaps you are one of them or hope to be one of them in the near future. While it is true that Florida’s weather and tax system is very attractive, Florida’s legal system can be less inviting for unprepared snowbirds. Listed below are my five best planning tips for Wisconsin snowbirds who head to Florida for the winter.
Tip #1: Work with an attorney who is licensed in Florida.
The laws in the most popular winter destinations for snowbirds are surprisingly complex. In addition, the laws are often different in popular snowbird destinations. One must be especially careful if the documents are being executed in the snowbird’s winter destination.
This concept is especially true in Florida. For example, Florida does not allow agents appointed under a power of attorney instrument to convey homestead property unless that power is specifically listed in the power of attorney document. Even if the document gives the agent broad and extensive powers, the agent will not be able to convey the property unless the power to convey the homestead property is explicitly stated in the instrument. By working with local counsel, they will protect you from this type of error.
Tip #2: Review your insurance policies with your attorney and insurance professional before heading south.
A common mistake for snowbirds is for them to think that their insurance policies will automatically travel with them. For many of them, they will have proper insurance, but this assumption should be verified.
For most clients, their primary liability exposure will come from driving their car. This is especially true in South Florida, which is one of the most litigious areas of the country. Zebra, a popular online insurance search program, released its 2019 rankings for most expensive states to purchase automobile insurance. Florida was ranked fourth in the nation. Florida also had three cities in the top ten: Hialeah (3rd), Miami (4th), and Tampa (6th).
Snowbirds often fail to register their vehicles in Florida. Under Florida law, a car must be registered and have proper Florida auto insurance within 90 days of the car’s arrivals. Drivers who fail to register their vehicle and purchase enough insurance face draconian fines and penalties. Furthermore, there is a material risk that their Wisconsin auto insurance policy will not be effective if the car is deemed to be primarily based in Florida. Therefore, it is essential to both register the car and make sure that you have adequate insurance if you use your car for over 90 days in Florida.
Unfortunately, your other insurance policies must be evaluated too. Your health-care insurance must be carefully reviewed to make sure that it will work as intended. Special care must also be taken with your property insurance. Insurance companies often refuse to insure unoccupied properties. Therefore, if you own property in both Wisconsin and Florida, your lawyer should review your policies to make sure that they will work as planned. If there is exposure, you should respond according to your risk tolerance. The key is to understand your risk exposure, so that you may make an informed decision.
Tip #3: How long you plan to stay can have serious consequences.
If you are spending greater than six months out of the year in Florida, it may be advantageous to change your domicile to Florida. Florida does not have an individual income tax. Therefore, the income tax savings can be substantial.
A person’s “domicile” is their true, fixed and permanent home where they intend to remain permanently and indefinitely. A person can have only one true domicile.
There is no clean test for determining an individual’s domicile. Instead the courts review factors such as:
- How many days did the client spend in Florida?
- Does the client have a Florida driver’s license?
- Did the client file a Declaration of Domicile with the Clerk of Courts in the Florida County where they reside?
- Did the client register to vote in Florida?
- Are all of the client’s vehicles registered in Florida?
- Does the client’s pet(s) reside in Florida?
If you plan to change your domicile to Florida, then you should make sure that the answers to the above questions are “yes?”
Tip #4: Understand what kind of property you own in Florida.
If you own property in Florida, it is important to determine if it is homestead property. If it is homestead property, the property will be subject to many advantages along with some disadvantages.
There are three primary advantages to owning homestead property.
- Property tax increases may only increase by the consumer price index or 3%, whichever is lower.
- The first $25,000 of assessed value of the Florida homestead is exempt from all property taxes. An additional reduction of up to $25,000 in assessment also will be allowed if the property is worth at least $50,000; however, the second $25,000 exemption will not apply to school taxes.
- With some exceptions, the property cannot be sold by a judgment creditor to pay off a debt.
The tax advantages are very valuable to my clients, because they allow them to plan. Property taxes are a major expense for them. Many of my clients are living off of a fixed income. Therefore, it is very reassuring for them to know that they know exactly how much their property taxes will cost each year.
The asset protection advantages are also very comforting, although I do have some concerns that they may create a false sense of securities for some of my clients. For example, one of my clients was disappointed to learn that he had no asset protection on the house that he bought in Florida, since he primarily lives in Illinois. Therefore, his property was not homestead property and thus it really is not protected.
Under Florida law, the Florida resident’s primary home is considered their homestead property. The Florida resident is allowed unlimited protection for ½ of an acre if living within a municipality or 160 acres if living outside of an official municipality. The Florida Constitution provides its citizens unlimited liability protection for their homestead property. This means that the judgment creditor will be unable to force the sale of the home to pay off the money judgment. 
At a later date, I plan on writing an article on the various ways that homestead protection can be pierced. While it is a very powerful asset protection tool, it can be pierced in specific situations. For example, the Full Faith and Credit Clause often rears its head in Florida bankruptcy cases. The bankruptcy courts do not honor the homestead protections offered by the Florida Constitution unless the homeowner has lived in the property for at least 40 months. Therefore, buying a home in Florida after the client has been sued may not protect the home from seizure. Other common exceptions to the general rule are tax liens, pre-existing liens, mortgages, or mechanic’s liens.
 Fla. Stat. Ann. § 709.2201 (West)
 Fla. Stat. Ann. § 324.022 (West)
 Fla. Const. art. X, § 4
 11 U.S.C.A. § 522(p) (West)
This article does not constitute legal nor tax advice, and the reader should consult legal counsel to determine how this information applies to any specific situation.
Article by Attorney Daniel Glinert, member of the firm’s Trusts & Estate Team. Please contact Dan at firstname.lastname@example.org if you would like to discuss his article.