Does Florida Have An Estate Tax?
Of all the different types of taxes people think about, estate taxes are often overlooked. Truthfully, though many people will not have to pay estate taxes because of the current high lifetime exemption, estate taxes can be quite significant and place a real financial burden on your family. The federal government, as well as 12 states throughout the country, place a tax on the assets people leave to their heirs. So, does Florida have an estate tax? Below, our St. Petersburg estate planning lawyer answers this very common question.
What is an Estate Tax?
Estate taxes are also sometimes known as an “inheritance tax” or a “death tax” and there is good reason for this. Regardless of what they are called, these taxes place a tax on the assets in a decedent’s estate, and it does not typically matter what types of assets they are. Essentially, any asset in a person’s estate (including life insurance proceeds) can potentially have a tax placed on it. After a person passes away, the personal representative of the estate pays the taxes and then the remaining assets in their estate are distributed to the beneficiaries.
Florida Does Not Have an Estate Tax
Florida is inarguably one of the tax-friendliest states in the country. The Sunshine State does not have an income tax, and its property taxes are significantly lower than most other states in the country. Keeping in line with these tax-friendly laws, Florida also does not have an estate tax. This means that if you are a Florida resident when you die, your estate will not have to pay any estate tax to the State of Florida. However, if your estate is large enough, it will have to pay Federal estate taxes. For a number of other states, their residents must pay both the Federal estate tax and their state’s own estate tax.
When Estate Taxes Apply in Florida
There are times when your estate may have to pay an estate tax, even if you lived in Florida and they also reside in the state. In 2022, if your estate is worth more than $12.06 million, your estate will be subject to Federal estate taxes. This exemption is indexed to inflation and it will increase to $12.94 million in 2023. If your estate is large enough to be subject to Federal estate taxes, the tax rate is 40% on the portion of your estate that exceeds the lifetime exemption.
Our Estate Planning Lawyer in St. Petersburg Can Help You Avoid Taxes
Estate taxes may seem unavoidable sometimes but at Legacy Protection Lawyers, LLP, our St. Petersburg estate planning lawyer can help. Our seasoned attorneys can help you draft an estate plan that will protect your beneficiaries from unnecessary estate taxes. Call us now at 727-471-5868 or contact us online to schedule a consultation.