Florida Residency: Do You Have To Live in Florida Six Months For Asset Protection?

How long do you have to be a Florida resident to qualify for Florida’s asset protection laws? The answer is that Florida’ s asset protection exemptions apply immediately to new Florida residents; there is no minimum residency requirement.  Constitutional exemptions, including homestead, and statutory exemptions such as annuity and wage garnishment protect judgment debtors starting the first day they intend to make Florida their permanent and primary residence. Permanent residency intent is evidenced by a Florida drivers license, Florida car registration, Florida address on federal tax returns, and similar facts and circumstances. There is no minimum residency waiting period before a new Florida resident can asset his Florida asset protections against a creditor’s debt collection.

So, why do some of my clients and website readers ask whether they have to reside in Florida continuously for six months  in order to get asset protections afforded Florida residents? The answer is that there are different Florida residency rules in other areas of law, and some people confuse these other residency requirements with asset protection law. For example, there is a six month residency rule regarding state income tax.   Florida has no state income tax  or state inheritance tax,  whereas many other states, particularly in the northeast, have substantial income tax and inheritance tax. If a person has a residence in Florida and also a home in a higher tax state the question is what state is his residence for the purpose of state income tax. The general rule is that if the taxpayer lives in Florida more than six months during the year he is taxed under Florida’s rules. This is commonly referred to as the  “six month rule.” Taxpayers must conclusively demonstrate that they have been in Florida at least 180 days to escape state taxation where they live at other times during the year.

“Florida snowbirds” is a term used to describe people who live in Florida during the winter. Some of these snowbirds come to Florida primarily for warm winter weather. There is also a substantial number of wealthy people who stay in Florida from October through March or April (six months) l to make sure they are not subject to state income tax in any other state.

There is another six-month residency issue in federal bankruptcy law. When a debtor files Chapter 7 bankruptcy he is entitled to claim some  assets as exempt. The debtor does not have to surrender his  exempt assets to the bankruptcy trustee.  Florida bankruptcy law applies Florida’s state law asset  exemptions for bankruptcy debtors who have lived in Florida for two years prior to filing. If the Chapter 7 debtor has lived in Florida for less than 24 months then the law focuses on the debtor’s residency during the six months prior to filing. Bankruptcy law has a complicated formula to determine the debtor’s bankruptcy exemptions based on where he has lived during that six month pre-bankruptcy time.