THE FLORIDA CONNECTION-PART 2

People frequently ask us about how the laws in Florida differ from the laws of New York.

Here are a few of the thumb nail answers to questions posed by clients.

Florida Income Taxes. One of problems seniors have with New York is its income taxes. Yet Florida has no income tax. Florida does have what is termed an "intangible tax." An intangible tax applies to the value of nonexempt stocks and bonds owned by a Florida resident. The Florida intangible tax (if it applies) is a nominal one. Yet for retirees it's a horror. There is talk about the repealing of the Florida intangible tax so it may not be a concern in the future.

Estate Taxes. In order to entice New Yorkers and others to change their residences to Florida, Florida was one of the early states to impose only a "pick up estate tax?" What's a pick up estate tax? When decedent's estate must file and pay a federal estate tax, the Congress, out of sympathy for the decedent and his heirs, allows a full dollar for dollar credit (up to a certain amount) for any estate or inheritance tax in fact paid to the state of residence. So lets say that the federal estate tax is $573,800 for a taxable estate of $1,540,000. The maximum credit will be $70,800. Assuming that the state of residence was a pick up state (as NY is), the state of residence would collect an estate tax of $70,800 which would reduce the federal estate tax payable to the IRS by $70,800 and the estate tax payable shall be $503,000.

Medicaid in Florida. The Florida Medicaid program is known as the ICP or Institutional Care Program. Florida, unlike NY, is an income cap state. This means that if an applicant has more than a certain monthly income, Medicaid benefits are unavailable to the applicant. NY is a spenddown state. Irrespective of a person's monthly NY income, the applicant can nevertheless qualify for Medicaid by spending the monthly income over a certain amount down on that person's Medical related care and then obtain Medicaid benefits. While a Florida nursing home could easily cost in excess of $4,500 a month the Medicaid divider in FL is $3,300. It is important to note that the Florida Medicaid rules are very different than those in NY. It makes sense in many cases to strike up as relationship with a Florida elder law attorney.