Does Florida Have an Estate Tax?
Legal Insights Into Florida Estate Tax Rules.
Does Florida Have an Estate Tax and What Does That Mean for You?
Florida does not have a state estate tax or an inheritance tax. The absence of these taxes can lower the overall tax liability on an estate, meaning your beneficiaries may receive more of your assets.
This makes Florida a favorable state for estate planning, particularly for those with substantial wealth. However, federal estate tax laws still apply to estates that exceed the federal exemption amount. Therefore, it is important to understand how both state and federal laws will affect your estate.
What Is Florida’s Estate Tax and How Does It Work Today?
Florida does not have a state estate tax or an inheritance tax. This prohibition is part of the Florida Constitution, which means the state cannot impose such taxes on the transfer of assets to heirs. Consequently, your beneficiaries will not owe any state tax on their inheritance, regardless of your estate’s size.
Why Florida Does Not Have an Estate Tax
Previously, Florida’s estate tax was linked to a federal tax credit known as the “state death tax credit.” Congress eliminated this credit in 2001, which effectively nullified Florida’s estate tax. A subsequent constitutional amendment now prevents the state from introducing a new estate or inheritance tax unless the constitution is changed again.
In practical terms, this means that most estates of Florida residents will not need to file a state-level estate tax return.
When Federal Estate Tax Still Applies
Although Florida does not have an estate tax, federal estate tax laws remain in effect. The federal tax applies to the total value of a person’s assets at death. These assets can include real estate, investments, business interests, and some lifetime gifts.
For 2024, the federal estate tax exemption is $13.61 million per individual. Only the value of an estate that exceeds this exemption is subject to the federal estate tax, at rates up to 40%. For example, if an estate is valued at $15 million, only the $1.39 million above the exemption amount would be potentially taxable. The first $13.61 million would be exempt.
Key Federal Rules for Florida Residents
Several federal rules are important for Florida residents to understand:
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Portability for Married Couples: Married couples can combine their exemptions. This “portability” allows them to shield up to $27.22 million (in 2024) from federal estate tax if the proper election is made.
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Unlimited Marital Deduction: Assets left to a surviving spouse who is a U.S. citizen are not taxed at the time of the first spouse’s death. This is known as the unlimited marital deduction, and it delays any potential estate tax until the second spouse’s death.
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Lifetime Gifts: The federal estate and gift taxes are unified. This means that significant lifetime gifts can reduce the amount of exemption available at death.
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Inclusion of Non-Probate Assets: Some assets, like life insurance policies with named beneficiaries, may pass outside of the probate process but can still be included in the taxable estate for federal tax purposes.
The Importance of Estate Planning
The current federal estate tax exemption is set to decrease significantly after 2025 unless Congress enacts new legislation. This change could expose more estates to federal taxation.
While Florida’s tax laws simplify one aspect of estate planning, the federal rules are complex and ultimately determine whether an estate owes tax. The total value of your assets, how you title your property, and your overall estate structure are all critical factors in the final tax outcome.
How Do Florida’s Tax Rules Work Alongside Federal Estate Tax?
Florida’s lack of a state estate tax does not eliminate federal tax obligations for high-value estates. Federal estate tax rules still apply. In a market like Miami, where real estate and investment values can increase rapidly, an estate’s value can exceed federal exemption thresholds unexpectedly.
When Federal Estate Tax Applies
The federal estate tax applies to the total value of your assets when you die. This valuation, known as the gross estate, includes:
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Real estate, such as primary and secondary homes
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Investment and retirement accounts
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Business interests
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Certain life insurance proceeds, depending on the ownership structure
Under current law, as updated by the One Big Beautiful Bill Act signed on July 4, 2025, the federal estate tax exemption is permanent and adjusts annually for inflation. Building on the previous $13.61 million threshold, the exemption for 2026 is projected to exceed $14 million per person.
Only the portion of an estate’s value that surpasses this exemption amount is subject to tax. The tax is levied on the taxable amount at a top rate of 40%. For instance, if a Miami estate is valued at $18 million and the exemption is $14 million, the federal estate tax would apply only to the remaining $4 million.
Even if your net worth is currently below the exemption level, your estate’s value can grow over time due to factors like rising real estate values, investment returns, or business expansion.
Planning Tools to Reduce Tax Exposure
Federal law offers several tools to reduce or defer the estate tax. However, each must be implemented correctly.
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Marital Deduction: Assets transferred to a U.S. citizen spouse are not taxed upon the first spouse’s death. This only defers the tax, which will be assessed on the surviving spouse’s estate.
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Portability Election: A surviving spouse may use any unused portion of a deceased spouse’s exemption. This requires filing a federal estate tax return, typically within nine months of death, though an extension is possible.
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Annual Gifting: In 2026, you can gift up to $19,000 per person each year without reducing your lifetime exemption. This strategy can gradually lower the size of your taxable estate.
These tools are not automatic. They require precise timing, proper documentation, and integration into your comprehensive estate plan.
Consequences of Inadequate Planning
Without a proper plan, federal tax rules apply based on asset titles and values at death. Simultaneously, Florida’s intestacy laws will dictate asset distribution if you do not have a valid will or trust.
This can lead to several unintended consequences:
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A surviving spouse might have to share the estate with children from a previous marriage.
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High-value assets could be subject to federal estate tax without any strategies in place to minimize the liability.
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The probate process, especially for complex estates in Miami-Dade County, can delay the transfer of assets.
A revocable living trust can help manage asset distribution and avoid probate, but it does not automatically eliminate federal estate tax liability. Your tax exposure ultimately depends on the total value of your estate and its structure.
While Florida’s laws provide a favorable tax environment by removing one layer of taxation, federal law remains the determining factor in whether a large estate will owe tax.
Talk to a Florida Estate Planning Attorney
Estate and inheritance tax rules can shift, and your plan should reflect your current situation. For example, in 2026, you can gift up to $19,000 per person each year without reducing your lifetime exemption. Speaking with an attorney can help you understand how Florida and federal tax laws may affect your estate.
Kevin C. Martin, Attorney at Law, PLLC, offers free consultations to help Florida residents plan with clarity and confidence — reach out through our contact page to get started.