Earlier in life, most people say the responsibilities of family and work dictate where they live. But studies indicate that by age 61, most people believe they’re free to decide where and how they most want to live.
CNBC’s recent article, “A financial flight plan for snowbirds,” says that it's not surprising to see retirees move, at least part time, to their dream destinations. More than a third of retirees surveyed told Merrill Lynch that they’d already moved, and another 27% anticipated moving soon. But before you begin splitting time between two or more states, think about which state you want as your primary place of residence, or domicile because you can have multiple residences—but only one domicile.
Consider the advantages of one state over another. How much are you affected by climate? Is the state income tax an issue? Others have tax breaks on retirement income and real estate taxes for older residents. Once you’ve decided, be prepared to show the government that the state you picked is truly your domicile state. The government is not hesitant to investigate residents in other states and who say they don’t owe any taxes.
Each state has its own requirements to prove residency. We all know the basics: heading to the local DMV and changing your driver's license, or changing your mailing address and tax return address. A big mistake people make is having their income tax return sent to the wrong state--the federal government and state governments share this type of data.
You should also speak with an experienced estate planning attorney in your new domicile state to be certain that all your financial and estate-planning documents (your will, powers of attorney, and healthcare or medical directives) are still are legal under the laws of your new state.
You will also have to change your auto insurance policies to be adequately covered in both states.
Making the move and becoming a snowbird can be a big change, so experts suggest you give it a test run first. Some find that they miss their families and friends too much to spend the majority of their time in their once “dream locale.” Don't buy a new home in a different state right away. Try renting for a few months to see how you really adjust.
With the help of an attorney, these choices can be much easier. Van Dyck Law is here to help you with any questions and guidance you may require as you prepare to enjoy the retirement you have earned. Let us take care of the legal issues so you don’t have to. Call 609-580-1044 and let us help you make a financial flight plan.
Reference: CNBC (December 8, 2016) “A financial flight plan for snowbirds”