Transferring wealth & wisdom from generation to generation
Edward E. Wollman, JD, LL.M WOLLMAN, GEHRKE & ASSOCIATES, P.A.
OWNING A SECOND HOME IN FLORIDA
Owning a second home in Florida can be wonderful, but there are a few key considerations to keep in mind. From understanding estate laws to managing property taxes, this guide will walk you through the essential steps to secure your Florida property, ensuring your investment remains enjoyable and well-protected. FLORIDA VACATION HOMEOWNER’S CHECKLIST Are you considering becoming an official Floridian? Perhaps you own a vacation home or second residence in the Sunshine State, but are still domiciled up north. If you’ve already invested or are considering purchasing real estate in Florida, please join us in a review of the important legal issues to consider. TITLE CONSIDERATIONS Every situation is different so it’s imperative to carefully consider your personal situation. The most common means of holding property is through individual ownership or Tenants by the Entireties if you are married. Will the home be for personal use? Or do you plan to rent the property? The best course of action for each scenario is unique and will also result in very different risk management issues effecting potential higher insurance premiums. HOMESTEAD EXEMPTIONS Florida provides its residents with very generous homestead protections and exemptions, but also restricts the ability to transfer the homestead. If your new home will be your primary residence, all documentation evidencing Florida domicile must be dated on or before Dec. 31st. Once your new homestead is approved, the “Save Our Homes” exemption is another incentive that saves Floridians an enormous amount of money each year. The potentially complicated waters of transferring your homestead from another state are best navigated with a professional advisor. TAX IMPLICATIONS FOR OUT-OF-STATE OWNERS Florida’s lack of state income tax is attractive, especially for those earning rental income. However, out-of-state homeowners must consider property taxes and the need to collect and remit tourist or rental income taxes. Estate and capital gains taxes should be navigated with a tax advisor familiar with both your home state and Florida laws to optimize your financial strategy. CONDO COMMANDOS Beware of dog – or many cases the community home owner’s association (they do bite). Florida is notorious for overzealous HOA’s, so it’s important to read all the fine print about your new community before the closing date. Aside from fees for the upkeep of common areas, rules can range from parking restrictions to pets to the color of your mailbox. Failure to pay HOA dues can ultimately result in the association placing a lien on your property.
HOME WATCH COMPANIES If your Florida property is just a seasonal residence or vacation home, maintenance in your absence must be considered. Especially during hurricane season and humid summer months, finding a trusted and reliable home watch company is crucial. Without oversight, small issues can become major problems very quickly. Avoid water damage, mold, unwanted bugs, other animals, and criminal activity by ensuring the proper oversight while you’re away. In addition, we advise that you protect your home with a centrally monitored burglar and fire alarm. It’s also recommended to add a water leak detection system (consider an appliance malfunction with water flowing for several days or possibly weeks before the issue is resolved). INSURANCE Flood, wind, hurricane, umbrella… it’s a lot to think about. Don’t leave yourself vulnerable to liabilities. Lori Bassano, Partner at The Baldwin Group, advises, “With complexity such as insuring property in coastal Florida, a broker specializing in both national and regional insurers can help you navigate the most cost-effective and tailored coverage solutions to be sure you are prepared for the unexpected. Insurance programs should be monitored annually to remain relevant to changing needs and along with considering the latest loss mitigation tools to help our clients reduce or avoid a loss.” FINE ARTS, AUTOMOBILES & COLLECTIBLES If fine arts, automobiles, or other collectibles are stored in your second home, it’s vital to have an emergency plan in place during hurricane season if a storm threatens the peninsula. Strategies could include having items moved to local storage in Cat-5 Buildings (structures built to Miami-Dade Code). The same applies for boats and yachts moored behind the home on a boat dock/lift. There must be a contingency plan in place to protect these valuable assets.
Visit www.probate-florida.com to read more about this subject and other estate planning matters.
Ed Wollman is a Florida Bar Board Certified Attorney specializing in wills, trusts, and estates with over 35 years of experience practicing in the state of Florida.
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