Making headlines around the world was President Trump's decision to move his residency from the state of New York to Florida, the home of Mar-a-largo. With any move to another state, this would effect his estate plan in different ways. Some commentators have discussed his Florida's homestead property rules and Florida's estate taxes, among other aspects to the move. So what are the estate planning implications that President Trump would need to consider?
- Estate Taxes: While the exact amount of the President's net worth is unknown, we are certain that his estate well exceeds the current estate tax exclusion credit of $11.4 million. This amount would double as he is married, so he and the first lady have some $22.8 million dollars that they can pass estate tax free to his family. This amount raises according to inflation annually. Importantly, Florida does not have an estate tax of any sort. Any estate tax is purely a Federal tax. Generally speaking, any assets over $11.4 million (2019) distributed upon your death (potentially doubled if you are married) are taxed at 40% of the amount over the tax free credit. Most people do not have to worry about the estate tax but our President obviously does.
- Homestead Rules: Our President will be able to claim homestead on his residence at Mar-A-Lago. Florida homestead law is notoriously difficult, even for experienced attorneys, but there are two general rules we can mention:
- First, homestead law in Florida says that creditors cannot take your home except for three listed reasons. Here is a link to the Florida Constitution and the creditor's protection given to our homestead. Interestingly, the creditor protection for homestead even extends to your heirs upon your death.
- Next, Florida has a real property tax exemption for homestead property. In a nutshell, your homestead property provides a small property tax exemption ever year and places a cap on the assessed value it can increase every year at 3%. There is a lot to homestead taxes and here is a link to more.
- Reviewing his own estate planning documents: When you move to another state a local estate planning attorney should review your estate planning documents. While the President's last will and testament and other documents are going to be considered good under Florida law if done correctly under New York law, there could be some local nuance (such as homestead property) that his out-of-state documents could not anticipate.
If you want to learn more about Florida law, please look to the following: