Let’s face it. New England winters are harsh! As the chill of winter sets in, many Rhode Islanders migrate to warmer climates, spending the warm months up north, and the cold ones down south. We refer to them as “Snowbirds.” A Snowbird is somebody who leaves their colder, full-time residence to stay out the winter somewhere with higher temperatures. Traditionally, snowbirds have always been older, usually retired persons. However, with the increasing popularity of remote work, today’s Snowbirds are a more diverse population.

Snowbirds often maintain homes in Rhode Island (or Massachusetts) and Florida. While this lifestyle offers the best of both worlds, it can be very challenging if someone passes away while hunkering down for the winter. In this article I will talk about the issues that may arise when you split your residency between any two states.

 

First, Where is your primary residence, Rhode Island or Florida?

It is possible to have more than one residence. For income tax purposes, you are a resident of the state where you live for 183 days or more. But there are other factors that help determine where your primary residence is, such as driver’s license and vehicle registration, voter registration, or whether you own or rent your home. If you are filing a Rhode Island income tax return every year, you are probably a Rhode Island resident. If you are not filing a state income tax return, you are likely a resident of Florida (which has no state income tax). It is definitely worth mentioning here, that while you can have multiple residences, you can have only one domicile. Your domicile is a fixed place –  where you intend to return.

 

How To Determine Dual Residency and Your Domicile If You Have A Home In Rhode Island

Establishing your domicile—the place you consider your permanent home—is crucial for determining tax obligations and the applicable probate laws. If you split your time between Rhode Island or Massachusetts and Florida, the differences in the states’ laws can complicate matters at the time of death. To avoid confusion, you should clearly establish your domicile by spending more time in your preferred state. Other actions to take include registering to vote, obtaining a driver’s license, and using it as your primary address for tax returns and other legal documents.

Each state has its own set of laws governing wills, trusts, and probate. The estate plan you executed in Florida may not address some of the state specific issues, such as inheritance taxes, that present in Rhode Island and Massachusetts. Also, owning property in multiple states can trigger multiple probate cases. This can become a very stressful and expensive situation for your loved ones. You may avoid probate altogether by placing all of your assets into a living trust to avoid probate. An experienced estate planning attorney can also structure your living trust to protect your assets and minimize estate tax liability.

If you determine your state of domicile is different from what your estate plan documents reflect, you should meet with an experienced estate planning attorney in your new home state to update your plan.

 

Tax Implications To Consider As A Snowbird in Rhode Island

As a Snowbird, you must consider the complex landscape of state and federal estate taxes. For example, both Massachusetts and Rhode Island impose a tax on estates that exceed the current exemption amounts. Florida does not impose a tax on inheritance. However, even if you are domiciled in Florida, you may have to pay an estate tax on the property you own in another state. To determine which state’s tax laws are most favorable to you, review your assets – the value and where they are located – with an estate planning attorney and/or tax advisor so  you may take advantage of those favorable tax laws.

 

Medical Emergencies and Incapacity: Keeping Up With Healthcare Directives in Both States

Medical emergencies can happen anywhere, so having updated healthcare directives and powers of attorney recognized in both states is vital. Be sure to keep your advance healthcare directives and durable powers of attorney updated to ensure they are valid in both states. Consider keeping a copy of these documents at both residences or have them available digitally.

 

Make Sure You’re Protected With A Snowbird-Friendly Estate Plan

Planning ahead will give you peace of mind, allowing you to enjoy your time in both sunny and snowy locales without worry.If you have questions about your domicile or dual residency and your estate planning documents, click below to speak with an experienced estate planning attorney today.