Retired widow relocating to Florida

After losing her spouse, client wanted to explore the option of moving to Florida.

The Situation

  • Massachusetts resident for the previous 30 years
  • Strong desire to downsize large home and escape New England winter
  • Subject to a $600,000 MA estate tax upon death
  • Two adult children living in MA; no grandchildren
  • Valuable artwork purchased by late husband
  • Desire to continue philanthropic giving in more effective ways

Our Approach

  • Helped evaluate pros and cons of moving to Florida (income tax, estate tax, access to health care etc.)
  • Modeled the impact of the move on the financial plan (prepared scenarios on new property expenses, club membership, family travel expenses etc.)
  • Reviewed Social Security benefits and survivor options
  • Minimized capital gains taxes by establishing the adjusted cost basis on the MA property
  • Borrowed against the portfolio on margin at very favorable rates to purchase the new house in FL before selling the residence in MA
  • Provided a comprehensive list of recommended steps to change residency to FL
  • Terminated her private foundation and opened a donor advised fund (DAF) to lower costs and ease administration

Collaborating with Specialists

  • Confirmed the income and estate tax benefits of the move with her accountant
  • Introduced her to an appraiser to create an artwork inventory and to determine what to keep, sell or donate to charity
  • Connected her with a professional organizer to help sort and divest of household belongings
  • Introduced her to an estate attorney in FL to re-domicile her documents, retitle accounts and change beneficiaries
  • Updated auto, home and umbrella policies with insurance agent

Significant Results

  • Relocated to Naples, FL, in a community that supports her active lifestyle
  • Funded a $1M home purchase in FL with a 6-month bridge loan costing only $5,000
  • Eliminated the $600,000 MA estate tax and the annual $20,000 MA income tax
  • Amended and restated estate planning documents to satisfy FL law
  • Maximized Social Security by collecting as a surviving spouse while deferring her own benefits to grow 8% per year until age 70
  • Saved roughly $5,000 in annual administrative expenses by transferring to a DAF