Two certainties in life are death and taxes. Estate taxes are levied by the government on a deceased person’s estate. Estate taxes may also be known as death taxes. Some states do not have estate taxes, so that makes things a lot easier and less expensive.
If you die as a Florida resident, do you need to worry about estate taxes? The average person doesn’t, but a wealthy person might. Here’s what you need to know about state and federal laws so you can effectively plan your estate.
Does Florida Have an Estate Tax or Inheritance Tax?
No, Florida does not have a state estate tax. Florida also does not impose an inheritance tax. This means that heirs and beneficiaries do not have to pay state taxes on assets they inherit from a Florida estate. This applies regardless of the value of the estate or the relationship of the heir to the deceased.
Some other states do impose an inheritance tax on estates, and this tax may apply to beneficiaries. So, if you are a beneficiary of an estate that was administered outside of Florida, you will need to seek guidance as to whether you will need to pay taxes on that inheritance.
Federal Estate Tax Laws
Although there is no estate tax in Florida, you might still owe federal estate tax. In 2025, the exemption amount is $13.99 million per person. This means that estates worth less than $13.99 million do not pay any federal estate taxes at all.
The federal estate tax exemption is doubled for married couples. If a married couple plans properly, they can have an exemption of up to $27.98 million. Any assets owned by the decedent in excess of that amount are taxed. For example, if you are not married and die in 2025 owning assets worth $14.99 million, then $1 million is taxed.
Florida also has no gift tax. In 2025, the federal gift tax exclusion was increased to $19,000, per recipient, per tax year. Both the federal estate tax exemption amount and the annual gift tax exclusion amount are part of the Unified Credit. This means that taxable gifts made during a person’s lifetime count against the federal estate tax exemption they have left at their death. Accordingly, careful gifting strategies, along with other estate planning tools should be employed.
Federal Estate Tax Planning Strategies
To minimize federal estate taxes, Florida residents can use various strategies, such as:
- Gifting during lifetime (up to the annual exclusion amount, currently $19,000 per recipient per year for 2025)
- Irrevocable trusts to remove assets from the taxable estate
- Charitable donations
- Portability elections for married couples
Income Tax on Estates and Trusts
Estates often must file a Form 1041 – Income Tax on Estates and Trusts. This tax return reports the income generated by an estate or trust beginning with date of death up through the date that assets are distributed to beneficiaries. If an estate earns $600 or more in a year, this tax return will be required. Many estates earn this income through sources like capital gains, dividends, interest, and rental income.
If the income is distributed to heirs, then the heirs pay the tax on their personal returns. Each person who receives income receives a Schedule K-1, which tells them how much to report on their individual tax return.
Contact Us Today
Estate planning can be a complicated task, but it is made easier knowing that Florida has no estate taxes.
Make sure your estate plan is done right. A Florida estate planning lawyer from Kruse Law can assist you. Do not leave things to chance. My experience can give you peace of mind. Schedule a consultation today by filling out the online form or calling (727) 256-4860.