Avoiding Estate Tax in Florida

On behalf of Law Offices of Frye, Fortich & Garcia, P.L. | June 11, 2024 | Asset Protection

Navigating Estate Tax in Florida: A Guide to Protecting Your Assets

Florida is known for its favorable tax laws, especially when it comes to estate planning. As of 2024, Florida does not impose a state-level estate tax, which can be a significant advantage for residents of the Sunshine State.

The absence of a state estate tax means that the estates of Florida residents are only subject to federal estate tax. The federal estate tax exemption for 2024 stands at $13.61 million, meaning that estates valued below this threshold are not taxed at the federal level. For married couples, this exemption threshold doubles to $27.22 million for the couple’s combined estate after both spouses have passed away.

However, it’s important to note that while Florida does not have an estate or inheritance tax, other states’ taxes may apply if the deceased owned property in the other state at the time of their death.

For those with estates that may exceed the federal exemption limits, there are several strategies to consider for protecting your assets:

1. Gifting: Utilize the annual federal gift tax exemption to gradually transfer wealth without incurring taxes. In 2024, the federal gift tax exemption is $18,000 per recipient. Meaning a person can make a yearly gift to any person in this amount ($36,000 for a married couple), tax free, and without having to file a gift tax return. A gift in excess of this amount may or may not incur a tax obligation but a gift tax return must be filed. Because each person’s tax situation is unique, we strongly recommend that a Certified Public Accountant always be consulted.
2. Trusts: Establish various types of trusts to manage and protect assets. Some trusts can be structured in ways that minimize estate taxes and provide for beneficiaries.
3. Life Insurance: Life insurance proceeds are generally not subject to estate taxes and can be used to provide liquidity for paying any potential federal estate taxes.
4. Charitable Contributions: Donations to qualified charitable organizations can reduce the taxable estate and provide a legacy of giving.

It’s crucial for Florida residents and those with property in the state to stay informed about both federal and state tax laws that could impact their estate planning. While the current tax landscape in Florida is favorable, laws can change, and proactive planning is key to ensuring that your assets are protected and your legacy is preserved.

For more detailed information on estate planning and tax strategies, it’s advisable to seek professional guidance tailored to your individual circumstances. Estate planning is a complex field, and the right advice can make a significant difference in the preservation and transfer of your wealth.

Remember, the information provided here is for general guidance and should not be considered legal or financial advice. However, our attorneys are available for consultations to discuss your specific situation.

For further reading on Florida’s estate tax laws and planning strategies, call 305-931-3200 to speak to one of the experience estate planning attorneys at Frye, Fortich & Garcia, P.L.. We are dedicated to protecting your estate which requires careful planning and consideration of all applicable laws and regulations. With the right approach, you can ensure that your assets are safeguarded for the future.