Estate planning can be as much about limiting liability as it is about establishing a legacy. People with valuable resources often want to prevent creditors or tax authorities from intercepting their assets if possible.
Estate taxes can drastically reduce the overall value of an estate. The tax rates that apply start at 18% and can go as high as 40% in some cases, possibly more in certain jurisdictions where more than one tax applies.
Individuals hoping to maximize what their loved ones inherit or how much funding passes to a charitable cause may need to address the possibility of estate taxes. Are Florida residents at risk of estate taxes forcing the liquidation of their property after they die?
Florida does not have an estate tax
Like many other states, Florida abolished its state-level estate tax decades ago. Individuals who live in Florida do not need to worry about state estate taxes depriving their intended beneficiaries or heirs of an inheritance.
However, federal estate taxes apply regardless of the jurisdiction where an individual lives when they die. While some people have to worry about state-level estate taxes diminishing their resources, Florida residents generally only need to plan for federal estate taxes.
For those who die in 2025, it may be possible to exempt up to $13.99 million in property from estate taxes. Generally speaking, the greater the value of the property, the higher the tax rate. Some people may be able to establish estate plans that eliminate their estate tax obligations. Others can substantially reduce what their estates owe after their passing.
Creating or updating an estate plan to address estate taxes can be a smart decision. People who act to preserve their resources in advance may be able to limit how much of their property passes to the federal government when they die.