Estate Planning Law

Do Inheritance And Estate Taxes Apply In Florida?

If you’re thinking about passing something on to your beneficiaries, you should know what you’re getting into. Inheritance taxes may apply, and the rules may be different depending on where you live. This article will help you understand inheritance taxes in Florida and whether they apply to you.

If you want experienced legal counsel after reading the information provided here, we encourage you to call Doane & Doane to speak with our estate planning attorney.

What Is Inheritance or Estate Tax?

Inheritance tax is the tax you may owe if you receive assets in the form of an inheritance. The tax is designed to stop people from transferring large amounts of wealth and property to their children, who will likely be in a higher tax bracket than the person who passed away. 

In the United States, inheritance tax is only applicable in the following 11 states:

  • Connecticut
  • Hawaii
  • Illinois
  • Maine
  • Massachusetts
  • Minnesota
  • New York
  • Oregon
  • Rhode Island
  • Vermont
  • Washington

As you’ve likely surmised, Florida doesn’t have an inheritance tax. However, that doesn’t necessarily mean you are exempt from paying taxes on an inheritance. If you’re confused, don’t worry.

Keep reading to learn more about Florida’s inheritance tax laws and how they apply to you.

Florida Inheritance Tax Law

One of the key reasons people choose to move to Florida is because of the state’s attractive Constitution—it expressly prohibits residents from being charged inheritance taxes. Moreover, Florida’s state legislature can’t enact any kind of inheritance or estate tax that goes against Florida’s Constitution. If this law ever does get overturned, it will be because 60% of Florida voters voted for it. 

With all that said, it’s important to note that Florida’s inheritance tax law doesn’t apply to other states. So it’s possible that you will still have to pay inheritance taxes in a state that permits it by law. In addition to this potentiality, Florida’s stance on inheritance taxes doesn’t exclude federal inheritance taxes.

But you’ll only have to pay federal inheritance taxes if the estate’s lifetime limit surpasses $11.7 million. It’s safe to say that there are more people who won’t have to pay federal inheritance taxes than those who will.

Why Does Inheritance Tax Apply?

Inheritance tax is a tax incurred when property is transferred from the deceased individual to their heirs. It may also be called estate taxes. The amount of inheritance tax varies by state, with some states having no such tax at all.

The inheritance tax rate depends on the state and ranges from as low as zero percent (like Florida) to as much as 16 percent (such as Washington and Hawaii). Some states allow certain exemptions, such as an exemption for property that passes to a surviving spouse or an exemption for charitable contributions made by the deceased individual during their lifetime.

Some states also have an inheritance tax credit or deduction designed to help balance out the burden of the estate or inheritance taxes paid by beneficiaries. Fortunately for Floridians, none of these factors are of concern.

How to Make Sure You Pay Minimal Taxes

Florida doesn’t have a state inheritance tax. But that doesn’t exclude other taxes. If you want to minimize your tax impact, you should carefully approach estate planning before proceeding. 

First, meet with an experienced estate planning attorney to assist you. Your attorney will work with you to see to it that you pay as few taxes as possible. One way of achieving this is why lowering the total value of the estate. It’s possible that you will pay no taxes at all. But if that’s not possible, your estate planning attorney may still be able to lower your estate’s value to where you’re paying the bare minimum on taxes. 

For these reasons, you should contact Doane & Doane Attorneys at Law today. We will schedule you to meet with our estate planning attorney to discuss your needs. At Doane & Doane, we have extensive experience assisting clients in estate planning, wills, trusts, and more.

As such, you can trust that we have the knowledge and expertise needed to provide you with the best legal counsel in Palm Beach County. So give us a call and see the difference we can make in your life.

Speak with an Estate Planning Attorney Today. Call Doane & Doane Attorneys at Law

Doane & Doane specializes in tax matters and other areas of law. If you have questions or need experienced legal counsel in Palm Beach County, don’t hesitate to contact our law office to set up a time for a consultation. You may contact us directly by calling 561-656-0200. If you prefer, you may also reach us by filling out and submitting this contact form.

The information in this blog post is for reference only and not legal advice. As such, you should not decide whether to contact a lawyer based on the information in this blog post. Moreover, there is no lawyer-client relationship resulting from this blog post, nor should any such relationship be implied. If you need legal counsel, please consult a lawyer licensed to practice in your jurisdiction.