Florida

Family offices are increasingly attracted to Florida for cross-generational wealth management and the state's health and wellness hub status. The absence of personal income, estate, or inheritance taxes, competitive corporate tax rates, robust legal infrastructure, and high quality of life make it an ideal location for effective wealth transition and investment management.

Table of Contents

Introduction

Evaluation categories

  • Tax regulations & incentives
  • Legal & regulatory structures
  • Economy & political climate
  • Services & talent access
  • Culture & lifestyle considerations
  • Resources

    Key numbers

    FAQ

    florida
    Updated on June 13, 2024

    Introduction

    The Sunshine State of America

     

    Family offices have been flocking to Florida in recent years because its tax regulations offer significant incentives for investors, contributing to its status as a burgeoning hub for financial services. The state does not levy personal income tax, including on interest and dividend income, which is particularly advantageous for family offices that manage considerable investment portfolios. This policy not only facilitates wealth growth within these entities but also attracts HNWIs and investment funds seeking to maximise post-tax returns.

     

    Furthermore, Florida’s exemption from estate and inheritance taxes aligns with the strategic goals of family offices focused on intergenerational wealth transfer without the heavy tax burdens found in other states. In addition, the state’s low corporate taxes make it even more attractive for businesses.

    Notable: The No.1 Retirement State in the US

    Florida is considered the top choice for retirees in the United States due to its high quality of life and affordability. Retirees with substantial wealth benefit from the state’s favourable tax environment, including exemptions on various retirement incomes and no state income tax. With 237 days of sunshine per year, South Florida’s warm climate allows for year-round outdoor activities such as enjoying pristine beaches and world-class golf courses.

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    Partner and Strategic Advisor, Simple
    Jason Pinkham

    United States of America

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    These are experts from our network who deeply understand specific topics or subject matter, but can also help navigate the local ecosystem with network, connections, insights, services, and more.

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    Evaluation categories

    1. Tax regulations & incentives

    Florida is well-known for its tax-friendly environment, making it an attractive destination for high-net-worth individuals and their families. The absence of a state income tax significantly reduces the tax burden on investment and the exemptions from estate tax and inheritance tax, making it an even more desirable location for wealth management and succession planning. These tax incentives, combined with a robust legal and regulatory framework, create a thriving ecosystem for family offices. Moreover, the competitive real estate market and high quality of life make Florida a popular choice for family offices and HNWIs from all over the US.

    Florida is one of the few states in the U.S. that does not impose a personal income tax. The absence of state income tax can result in considerable savings for family offices, especially when compared to states with high tax rates. The lack of a state income tax extends to interest and dividend income, further enhancing investment returns.

    Florida does not levy estate or inheritance taxes, which is a significant advantage for wealth transfer planning. This policy allows family offices to pass on assets to future generations without the deduction of state taxes, preserving wealth within the family.

    While Florida does have sales and property taxes, the overall tax burden remains relatively low compared to other states. The state’s sales tax rate is moderate, and property taxes are in line with national averages. However, property tax exemptions, such as the homestead exemption, can offer further savings for residents.

    2. Legal & regulatory structures

    Florida has well-designed legal and regulatory frameworks in place to support the creation and operation of family offices. The state's laws have been formulated in a way that facilitates the establishment of trusts and other asset protection structures which are important for wealth preservation and estate planning. The state has various trust structures, such as revocable, irrevocable, and dynasty trusts, that can be effectively used for asset protection, estate planning, and tax optimisation. These trust laws allow for long-term wealth preservation across multiple generations. The state's regulatory bodies, such as the Florida Office of Financial Regulation, adhere to high standards for financial activities while ensuring compliance with both state and federal laws.

    A revocable trust, which is also known as a living trust, is established during the lifetime of the trustor (the person who creates the trust) and can be altered or revoked at any time before their death. This type of trust offers several benefits for family offices, including control and flexibility over assets, the ability to modify trust terms as circumstances or intentions change, avoidance of probate upon the trustor’s death, and the maintenance of privacy over the distribution of assets, unlike wills which become public record through probate.

    An irrevocable trust is a legal instrument that, once established, cannot be easily modified or terminated by the trustor. The assets are then transferred to the trust and a trustee is appointed to manage them according to the trust’s terms. Irrevocable trusts provide several benefits for family offices, including asset protection, estate tax benefits, and controlled distribution. Assets in an irrevocable trust are generally protected from creditors, lawsuits, and claims against the trustor or beneficiaries. Since the assets are no longer considered part of the trustor’s estate, they may be exempt from estate taxes, potentially resulting in significant tax savings. Finally, they support long-term goals like education funding or philanthropy.

    Dynasty trusts are a type of irrevocable trust that aims to extend beyond the lifespan of a single generation, potentially lasting forever, depending on state laws. In Florida, these trusts can last up to 360 years, allowing for the transfer of wealth across many generations without the imposition of estate taxes at each transfer.

     

    For family offices, Dynasty Trusts provide a means to establish and maintain a family legacy, supporting philanthropic endeavours, business investments, and family governance across generations. Additionally, dynasty trusts can dictate the terms of asset distribution according to the trustor’s wishes, ensuring that the family’s wealth is used in a way that aligns with their values and goals.

    3. Economic & political climate

    Florida's economy, political stability, and business-friendly environment make it an ideal location for family offices looking to invest in the US. With over 22 million residents, Florida offers a large and dynamic market with significant business opportunities across various sectors. The state's pro-business climate, low taxes, excellent education systems, and competitive costs make it an attractive destination for family offices seeking to invest in different industries. Florida's strategic geographic location, advanced infrastructure, and multicultural workforce make it a gateway to Latin America and the Caribbean, providing family offices access to international markets.

    The economic landscape of Florida provides a conducive environment for the growth and operation of family offices. The state’s economy is diverse, with strong sectors in finance, technology, real estate, and tourism. This economic diversity offers many investment opportunities, from traditional assets to emerging markets and industries. The state’s economic policies, coupled with a commitment to innovation and technology, have fostered a vibrant ecosystem for startups and tech companies, providing family offices with unique investment opportunities in high-growth sectors.

    Florida’s political climate is notably pro-business, fostering an environment encouraging investment and economic growth. The state’s strong asset protection laws offer a layer of security to investors and family offices managing substantial wealth. The state’s political leadership has historically prioritised job creation, economic diversification, and a competitive marketplace, further enhancing its appeal to domestic and international investors.

    Florida’s strategic location as a gateway to Latin America and beyond makes it an attractive destination for investors, particularly family offices seeking diverse and international investment opportunities. Florida’s ports, airports, and investment in infrastructure support efficient movement of goods and passengers, enhancing its role as a logistics and transportation hub. The state’s real estate and tourism industries benefit from increased visitors and investors from Latin America, while Miami serves as a financial centre for the region.

    4. Services & talent access

    Florida offers a wide range of professional services and has a skilled workforce. The state's focus on financial and professional services has led to a pool of experts in wealth management, legal services, and investment advisory areas. This is an essential factor that makes it attractive to family offices. Florida's well-developed financial sector provides access to various services such as banking, investment management, legal advice, and accounting. These services support family offices' complex needs, ranging from day-to-day management to strategic planning and compliance. Moreover, Florida's favourable immigration policy attracts skilled professionals from different parts of the world, further enhancing the state's talent pool.

    Florida’s focus on education and workforce development has cultivated a skilled labour pool with strengths in finance, technology, hospitality, and other sectors crucial to family offices. The state’s universities and colleges are proactive in aligning their programs with industry needs, ensuring a steady stream of qualified graduates.

    The state’s quality of life, climate, and lack of state income tax make it an attractive destination for talented professionals. This inflow of talent supports family offices in building high-calibre teams for their operations and investment activities.

    5 Culture & lifestyle considerations

    Florida is not only a great place for conducting business, but it is also an ideal destination for relaxation and leisure. It offers a vibrant and diverse culture and lifestyle to family offices and their principals. The state is known for its high quality of life, supported by its warm climate, beautiful natural surroundings, and a wide range of recreational activities. The sunny state's cultural diversity is reflected in its many cultural institutions, festivals, and community events catering to various interests and backgrounds. This multicultural environment fosters a sense of community and belonging for individuals and families from around the world, making it a welcoming location for global family offices seeking to establish a base in the United States.

    Florida is renowned for its high quality of life, which is reflected in its emphasis on health and wellness. The state boasts an extensive network of healthcare facilities, wellness centres, and outdoor spaces for physical activities that promote healthy living. For family offices, the availability of high-quality medical services and a focus on well-being is crucial for ensuring the health and happiness of their principals and employees.

    Education is another critical aspect of Florida’s culture and lifestyle. The state boasts a range of top-rated educational institutions, from primary schools to universities, offering excellent opportunities for family members to pursue academic and personal development. This strong emphasis on education aligns with the values of many family offices, making Florida an even more attractive location for those prioritising the growth and education of the next generation.

    Florida’s culture and lifestyle offer a compelling mix of natural beauty, cultural diversity, recreational opportunities, and a focus on health and education. These elements create a nurturing and enriching environment for family offices and high-net-worth individuals, supporting not just their financial objectives but also their broader lifestyle aspirations and values.

    Service Providers

    fireman capital partners

    Fireman Capital Partner

    United States of America
    Fund & External Asset Manager

    Fireman Capital Partners is a private equity firm specialising in buyouts and growth equity based in Massachusetts.

    Family Offices

    Biltmore Family Office

    United States of America

    Founded in 2008 by Chris Cecil, Biltmore Family Office provides specialised wealth management services for families possessing generational wealth in North Carolina and Florida.

    Kandor Global

    Kandor Global is an SEC Registered Investment Advisor (RIA) based in Miami, Florida, catering to ultra-high-net-worth individuals, families, and institutions worldwide.

    Key numbers

    At a glance

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    Comparison United States: Florida

    Corporate Income Tax Rate

    5.5%

    Henley Passport Index 2023 Rankings

    6

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    FAQ

    Q

    Do family offices require a formal registration in Florida?

    A
    Formal registration of a family office is not always required in Florida. However, if a family office structure involves managing assets for multiple family members or acting as a trustee, registration with the Florida Office of Financial Regulation (OFR) may be required.
    Q

    What are some prominent family office industry events and conferences in Florida?

    A
    The Florida Family Office & High Net Worth Conference is hosted during Miami Art Basel week and combines wealth management topics with art and luxury experiences. While not exclusive to Florida, the North American Family Office Forum occasionally takes place in the state as well.

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