Dear Bogleheads,
I am currently in the process of restating my Revocable Living Trust after moving from Ohio to Florida. Fidelity personnel have suggested a Florida Community Property Trust (FLCPT) as an alternative to a standard joint trust or separate trusts.
I’m trying to determine if the tax "juice" is worth the squeeze regarding asset protection. Here are the details:
•Ages: [Him 62; Her 60]
•Current Asset Mix:
oTaxable ~ $15M
oReal Estate: Primary residence in Florida ($3M)
oRetirement Accounts: $[5.5M] in IRAs (I understand these don't go in the FLCPT)
•Cost Basis Issue: We have several highly appreciated positions in our taxable account. A "double step-up" at the first death would save approximately $10M in capital gains taxes for the survivor.
•Liability Concerns: we have a $2M umbrella policy, one spouse will be still practicing medicine (primary care) until Sep' 26.
•The Conflict: I am aware that moving assets into an FLCPT likely destroys Tenancy by the Entirety (TBE) protection, which is very strong in Florida. In an FLCPT, 50% of the assets would likely be reachable by a spouse's individual creditor.
My Questions:
1.For those in Florida, did you choose the FLCPT for the tax benefits, or did you stick with TBE for the asset protection?
2.Is the "Double Step-Up" benefit significant enough to outweigh the loss of TBE for a taxable account of this size?
3.Are there "hybrid" approaches anyone has used (e.g., keeping the house TBE but putting the brokerage in the FLCPT)?
4.Does the fact that I'm restating an Ohio trust (a non-community property state) present any specific hurdles I should be aware of?
Looking forward to your wisdom.
Thanks!
SRM007
I am currently in the process of restating my Revocable Living Trust after moving from Ohio to Florida. Fidelity personnel have suggested a Florida Community Property Trust (FLCPT) as an alternative to a standard joint trust or separate trusts.
I’m trying to determine if the tax "juice" is worth the squeeze regarding asset protection. Here are the details:
•Ages: [Him 62; Her 60]
•Current Asset Mix:
oTaxable ~ $15M
oReal Estate: Primary residence in Florida ($3M)
oRetirement Accounts: $[5.5M] in IRAs (I understand these don't go in the FLCPT)
•Cost Basis Issue: We have several highly appreciated positions in our taxable account. A "double step-up" at the first death would save approximately $10M in capital gains taxes for the survivor.
•Liability Concerns: we have a $2M umbrella policy, one spouse will be still practicing medicine (primary care) until Sep' 26.
•The Conflict: I am aware that moving assets into an FLCPT likely destroys Tenancy by the Entirety (TBE) protection, which is very strong in Florida. In an FLCPT, 50% of the assets would likely be reachable by a spouse's individual creditor.
My Questions:
1.For those in Florida, did you choose the FLCPT for the tax benefits, or did you stick with TBE for the asset protection?
2.Is the "Double Step-Up" benefit significant enough to outweigh the loss of TBE for a taxable account of this size?
3.Are there "hybrid" approaches anyone has used (e.g., keeping the house TBE but putting the brokerage in the FLCPT)?
4.Does the fact that I'm restating an Ohio trust (a non-community property state) present any specific hurdles I should be aware of?
Looking forward to your wisdom.
Thanks!
SRM007
Statistics: Posted by SRM007 — Tue Dec 30, 2025 7:41 am — Replies 0 — Views 26