Do Florida Probate Estates Need to Worry About Estate Taxes?

If you are a Florida resident thinking about their long-term estate planning, or the recently named personal representative of a Florida probate estate, you may be wondering about the potential impact of the estate tax, a/k/a the “death tax.” Will the estate have to make a massive tax payment to the federal government? And are there additional estate or inheritance taxes imposed by the State of Florida?

The Basics of the Estate Tax

The estate tax is essentially a levy on a person’s right to transfer their property upon their death. The tax is based on the total “fair market value” of a person’s assets at the date of their death. One thing to keep in mind is that a person’s “gross estate” for purposes of calculating the estate tax is not the same thing as their probate estate. For example, assets that a person transfers to a living trust are not considered part of their probate estate but would be included in their gross estate.

The federal government imposes an estate tax for all gross estates exceeding a certain threshold. Fortunately, that threshold is quite high, so most Florida probate estates will not have to file or pay estate tax. The actual amount of the threshold depends on when the decedent passed away. For persons who died in 2023, the federal estate tax threshold is $12,920,000. For persons who die in 2024, their estate’s threshold will be $13,610,000.

In the case of a married decedent, however, their estate may “pass along” any unused portion of their estate tax exemption. To put it simply, the estate tax threshold is effectively double for married couples. Additionally, there is an unlimited “marital deduction” for property left from one spouse to another. For example, say Steve and Carol were married. Steve died first. He left his entire estate to Carol, which is exempt from estate tax under the marital deduction. Carol then passed away in 2023. Her estate could claim the unused portion of Steve’s estate tax exemption and pass along an estate of up to $25.84 million without owing any federal estate tax.

It is also important to note that if you are a Florida resident, you probably only need to worry about the federal estate tax. Florida abolished its state-level estate tax in 2004. A handful of other states continue to impose their own estate taxes. A few also have inheritance taxes. If you die leaving property in such a state–such as real estate–your estate may need to deal with those local taxes. But for the vast majority of Florida residents, the estate tax will simply not be an issue for their future estates or heirs.

Contact Florida Estate Litigation Attorney Mark R. Manceri Today

If you are involved in any legal matter regarding the settling or disposition of a Florida probate estate, it is important to seek out qualified legal advice. To speak with a Pompano Beach estate and trust litigation lawyer, contact the offices of Mark R. Manceri, P.A., at 954-491-7099 today to schedule a consultation.