Inheritance Tax FL: Florida Estate Taxes, Federal Estate Tax, and Estate Planning

Questions about inheritance tax FL obligations and whether an FL estate tax applies often arise early in the estate administration or estate planning process.

Clients also frequently ask, does Florida have an inheritance tax, particularly when comparing Florida’s laws to states that still impose death taxes.

In our experience with Florida courts and the IRS, navigating the “death tax” landscape is often simpler than clients expect—but only if you understand the massive shift in federal law that took effect in 2026.

Florida does not have a state inheritance or estate tax; however, Florida residents are subject to federal estate taxes if their gross estate exceeds $15 million in 2026.

While the state abolished its “pick-up” tax in 2005, high-net-worth individuals must still plan for a 40% federal tax rate on assets above the exemption threshold.

Even though many families worry about taxes in Florida, it is important to understand that Florida law does not impose a Florida inheritance tax or state-level estate tax on beneficiaries or estates.

This means heirs generally receive inherited assets without paying taxes directly to the state.

However, the federal government imposes estate taxes that apply uniformly across all states, including Florida.

If an estate exceeds the applicable federal exemption amount, significant tax implications may arise, requiring careful valuation of assets, strategic gifting, and trust planning.

Proper estate planning can minimize exposure to federal estate taxes while ensuring compliance with both federal regulations and applicable Florida law governing probate and asset transfers.

Why Florida Tax Status Matters for Your Legacy

Florida does not have a state inheritance tax or estate tax. While Florida law provides constitutional protection against these state-level taxes, Florida residents remain subject to federal estate taxes.

In 2026, estates exceeding the $15 million federal estate tax exemption face a 40% tax rate on all taxable assets.

We often see clients move to the Sunshine State specifically for its “tax-friendly” reputation. Understanding the distinction between state and federal obligations is the cornerstone of a successful estate plan.

Because Florida provides a constitutional shield against state-level death taxes, every dollar you save from the IRS stays directly with your heirs.

Families researching inheritance tax FL exposure, potential FL estate tax liability, or asking does Florida have an inheritance tax should understand that Florida’s favorable tax structure can significantly enhance wealth preservation.

Strategic planning allows beneficiaries to maximize inheritances, minimize federal tax burdens, and take full advantage of Florida’s estate-friendly legal and financial environment.

Who This Planning Is For (and Who Can Relax)

For: Florida residents with individual estates approaching or exceeding $15 million, or married couples with combined assets over $30 million.
For: Business owners with illiquid assets that could face a “fire sale” to pay federal taxes.
Not For: The vast majority of Floridians whose total assets (including life insurance and real estate) fall safely below the eight-figure federal threshold.

Where the Rules Apply

These rules apply to anyone domiciled in Florida. However, if you own real estate in states like New York or Pennsylvania, you may still owe “ancillary” inheritance taxes to those specific jurisdictions, even as a Florida resident.

In our experience with Florida courts, establishing where a case is filed is just as critical as the tax rate itself. Under Florida Statute 733.101, the proper venue for probate is the county where the decedent was domiciled at the time of death.

If a nonresident owned property located in Florida but lived elsewhere, we look to the county where that specific property is situated to initiate the process.

These rules generally apply to individuals domiciled in Florida, meaning Florida is considered their permanent legal residence at the time of death.

Florida residents benefit from the absence of a state-level inheritance or estate tax, which often simplifies probate administration.

However, estate planning becomes more complex when a decedent owns property outside Florida. If a Florida resident owns real estate or tangible property in states such as New York, Pennsylvania, or other jurisdictions that impose state inheritance or estate taxes, the estate may be subject to ancillary probate proceedings in those states.

Ancillary probate Florida issues commonly arise when out-of-state real estate must be transferred through a secondary probate process.

During out of state probate, the estate may become subject to ancillary estate administration, ancillary probate requirements, and potential state inheritance tax liability depending on the laws of the property’s location.

Families often overlook multi state probate administration, which can trigger additional court filings, increased administrative costs, and unique ancillary probate tax implications.

Proper estate planning for out of state property, including trust planning and coordinated titling strategies, can help reduce the risk of multiple probate proceedings and minimize tax exposure across jurisdictions.

How the Federal Estate Tax Impacts Floridians

While Florida keeps its hands out of your estate, “Uncle Sam” remains a silent partner for wealthy families.

The Threshold: In 2026, the One Big Beautiful Bill Act stabilized the individual exemption at $15 million.
The Rate: Any amount over the exemption is generally taxed at a flat 40% rate.
Who Pays: The tax is paid by the estate itself before assets reach the beneficiaries.

Attorney Insight: We recommend a full inventory of your “Gross Estate,” which includes not just your bank accounts, but also your home, business interests, and life insurance payouts.

The Truth About the Florida Inheritance Tax for Florida Residents

A frequent misunderstanding among both a Florida resident and out-of-state families is the belief that a florida inheritance tax exists or that beneficiaries must pay inheritance taxes in Florida when assets transfer after death.

In reality, there is no florida inheritance tax, no florida estate tax, and no state death tax in Florida imposed under current Florida probate law.

Most Florida residents, as well as nonresidents inheriting property located in Florida, do not pay a state inheritance tax Florida or Florida death tax because these taxes were eliminated years ago.

Instead, any potential liability typically arises from the federal estate tax, which applies nationwide regardless of where a decedent lived.

Families often confuse federal estate tax exemptions, federal estate tax limits, and federal death tax rules with a nonexistent inheritance tax in Florida.

Understanding how these concepts work together is critical to proper planning. While Florida probate taxes are often misunderstood, Florida does not impose a separate inheritance or estate tax under Florida law, making estate tax planning Florida primarily focused on minimizing exposure to federal liability.

Effective federal estate tax planning begins with determining whether an estate exceeds the estate tax exemption 2026, which requires an accurate gross estate valuation and proper taxable estate calculation.

These steps help ensure compliance with IRS estate tax rules, confirm applicable estate tax filing requirements, and determine whether estate tax return Form 706 must be filed.

For larger estates, high net worth estate planning Florida often incorporates advanced wealth transfer tax strategies, including asset protection estate planning and trust planning to avoid estate taxes.

When properly structured, these strategies help families comply with federal inheritance tax laws while preserving assets and reducing unnecessary tax exposure.

Maximizing the Federal Estate Tax Exemption in 2026

The federal estate tax exemption for 2026 is $15 million per individual, meaning a deceased person can transfer this amount to deceased’s heirs tax free.

Estates valued above this threshold face a federal estate tax rate of 40%, creating a significant tax liability for those who do not utilize advanced estate taxation strategies.

Strategic Gifting and the Federal Gift Tax

We often see clients use lifetime gifts to reduce the size of their taxable estate before a decedent’s death. Under current federal law allowed rules, you can make a federal gift using the annual gift tax exclusion, which is $19,000 per recipient in 2026.

Any money or inherited assets transferred within this limit do not count against your lifetime exemption and do not require you to file a federal gift tax return (Form 709).

For wealthy individuals, an aggressive gifting program can significantly lower the taxes owed by the decedent’s estate later.

Understanding Florida State Taxes and Income

One reason Florida remains one of the most tax friendly states is that residents do not pay income tax at the state level. For income tax purposes, this means retirement income, pension plans, and social security benefits are tax free from Florida state taxes.

While you still owe taxes to the IRS for federal income tax, the lack of a state income tax provides more income to fund larger estates or pay for property taxes on property located in the Sunshine State.

Unlike many northern states, Florida has no estate or inheritance tax, ensuring that inherited property passes to beneficiaries without a state-level “death tax”.

Managing Estate Tax Exemption and Liability

To minimize your estate tax liability, we frequently provide advice on using the unlimited marital deduction, which allows a deceased individual to transfer unlimited assets to a surviving spouse who is a U.S. citizen without paying taxes.

However, for smaller estates that may grow or larger estates already over the limit, it is vital to track all inherited assets, including retirement accounts, to determine if a federal estate tax return (Form 706) is required.

Our evaluations are based solely on current statutes to ensure your plan reflects the latest federal gift tax and estate tax exemption levels.

While the marital deduction protects assets for a surviving spouse, the situation becomes more complex if a resident dies intestate (without a will).

Under Florida Statute 732.102, the law dictates the spouse’s share based on whether there are surviving descendants from a prior marriage.

We often see families surprised to learn that a spouse may only be entitled to 50% of the intestate estate if the deceased person had children from another relationship—a complication that can drastically impact your taxable estate calculations.

Families researching inheritance tax FL exposure, possible FL estate tax obligations, or asking does Florida have an inheritance tax should recognize that proper estate planning remains essential.

Although Florida avoids state-level death taxes, federal liability, intestate succession risks, and asset valuation issues can significantly impact distributions without proactive legal and tax planning.

Essential Florida Probate and Estate Tax Glossary

To effectively manage estate taxation and the probate process in Florida, you must understand the specific legal terminology used by the federal government and local courts. In our experience, mastering these terms helps Florida residents and deceased’s heirs navigate the complexities of a decedent’s estate with confidence.

Decedant (or Decedent): The deceased individual whose assets are being distributed through the legal system.
Personal Representative: Known in other states as an “executor,” this is the individual appointed by a Florida judge to oversee the probate process, manage inherited assets, and ensure all taxes owed are paid.
Intestate: This term describes the situation of a deceased person who died without a valid last will and testament, requiring Florida law to determine how to distribute the property located in the state.
Letters of Administration: The formal court document that grants the Personal Representative the legal authority to manage the decedent’s estate, from accessing retirement accounts to selling real estate.
Summary Administration: A streamlined, “shortcut” version of probate available for smaller estates (under $75,000) or cases where the decedant’s death occurred more than two years ago.
Gross Estate: The total fair market value of all assets owned by the deceased individual at the time of death, used to calculate federal estate tax liability.
Ancillary Probate: A secondary legal proceeding required when a Florida resident owns property located in another state, or when a nonresident dies owning real estate in Florida.
Step-Up in Basis: A vital tax rule where the value of inherited property is reset to its fair market value on the date of death, often allowing heirs to sell assets tax free of capital gains.

Common Myths About Florida Inheritance and Estate Taxes

In our experience with Florida courts, we find that many clients arrive with “northern state” mindsets that don’t apply here. Below, we at Lorenzo Law debunk the most common myths to help you understand your true tax liability.

Myth 1: I will owe Florida a percentage of my inheritance. * Fact: Only six states in the U.S. currently have an inheritance tax, and Florida is not one of them. Florida abolished its estate tax in 2004 (effective 2005).
Myth 2: Inherited assets are always 100% tax-free. * Fact: While the inheritance itself isn’t subject to income tax, withdrawing funds from inherited traditional IRAs or 401(k)s may incur federal income tax.
Myth 3: The “Death Tax” only applies to cash and bank accounts. * Fact: The federal government calculates your taxable estate based on all assets, including real estate and property located out of state.
Myth 4: I have years to settle the estate’s tax bill. * Fact: The federal estate tax return (Form 706) must be filed within nine months after the decedent’s death.
Myth 5: If I have a will, I can skip the probate process. * Fact: Even with a valid will, the probate process in Florida is required for the court to verify assets and legally transfer them to deceased’s heirs.
Myth 6: I will lose money to capital gains taxes if I sell inherited property. * Fact: Inherited assets typically receive a step-up in basis, resetting the value to the fair market value at the time of death, which can significantly reduce or eliminate capital gains.
Myth 7: My spouse will have to pay taxes on the house I leave them. * Fact: Assets left to a surviving spouse are generally tax-free under the unlimited marital deduction provided by federal law.

Strategic Comparison: Estate Planning Tools in 2026

Feature	Revocable Living Trust	Irrevocable Trust (SLAT/ILIT)	Annual Gifting
Avoids Probate?	Yes	Yes	N/A
Reduces Estate Tax?	No	Yes	Yes
Asset Control	Full Control	Limited/None	None
Lorenzo Law Rec.	Essential for all	For high-net-worth only	Best for gradual reduction

Critical Florida Legal Requirements

Florida’s Protection Against State Taxes

Under Florida Statute Chapter 198, the state estate tax is effectively dormant. Florida’s Constitution actually prohibits the state from imposing an estate tax that exceeds the federal credit—and since that federal credit was replaced by a deduction years ago, the Florida tax remains at zero.

This means individuals concerned about inheritance tax FL exposure or potential FL estate tax obligations can take comfort in knowing the state does not independently tax inheritances.

For families still asking does Florida have an inheritance tax, the answer remains no, reinforcing Florida’s reputation as a premier jurisdiction for tax-efficient estate and legacy planning.

Essential Formalities for Portability

If you are a surviving spouse, you must file IRS Form 706 even if no tax is due. This “Portability Election” allows you to “port” or move your deceased spouse’s unused $15 million exemption to yourself, effectively securing a $30 million shield for your heirs.

How Lorenzo Law Evaluates Your Tax Exposure

In our experience, tax planning is not a “one and done” event. We evaluate Florida estates based on:

Liquidity: Do you have the cash to pay the IRS within 9 months of death?
Asset Growth: Is your $10M business today going to be a $20M business in five years?
Out-of-State Property: We review deeds for any property held in “tax-heavy” states that might trigger unexpected bills.

When analyzing your estate, we address common concerns involving inheritance tax FL, potential FL estate tax obligations, and questions about does Florida have an inheritance tax.

While Florida estate tax is not a concern, federal estate tax exposure, valuation issues, and multi-state asset ownership can still create significant tax liability that requires strategic planning.

Step-by-Step: Managing Your 2026 Estate Tax Strategy

Inventory All Assets: Include “non-probate” items like 401(k)s and life insurance.
Calculate Federal Exposure: Compare your total to the $15M (individual) or $30M (couple) limit.
Execute Gifting: Utilize the $19,000 annual exclusion per recipient to lower your taxable total.
Establish Irrevocable Trusts: Use tools like an ILIT (Irrevocable Life Insurance Trust) to keep death benefits out of the taxman’s reach.
File Form 706: Ensure your personal representative meets the 9-month deadline after a death to secure portability.

Beyond the IRS, we at Lorenzo Law ensure our clients meet the strict mandatory requirements of Florida Statute 733.2121.

This law requires the Personal Representative to publish and serve a “Notice to Creditors,” triggering a 90-day window for potential claimants.

Failing to perform this “diligent search” can leave the estate’s assets—and the deceased’s heirs—vulnerable to unexpected taxes owed or civil claims long after the probate process should have concluded.

Frequently Asked Questions

Does Florida have an inheritance tax?

No. Florida has no inheritance tax and has not had a state estate tax since 2005.

What is the federal estate tax exemption for 2026?

The exemption is $15 million per individual and $30 million for married couples.

What is “Portability”?

It is the ability of a surviving spouse to claim the unused federal tax exemption of their deceased partner.

Do I need a trust if my estate is under $15 million?

Yes. While you may not need a trust for tax reasons, a Revocable Living Trust is still vital to avoid the costs and delays of Florida probate.

Is there an estate tax in Florida?

No. Florida does not have a state-level estate tax. The only estate tax exposure for Florida residents comes from the federal government.

Does Florida have an estate tax for small estates?

No. Regardless of size, Florida does not impose an estate tax. However, even smaller estates should be mindful of the probate process and final income tax filings.

Does Florida have estate taxes on property owned by non-residents?

Florida does not tax the estate, but if a non-resident owns real estate here, that property must go through a Florida ancillary probate.

Legal Note: This information is for educational purposes only and does not constitute legal advice. Results are not guaranteed and vary based on individual circumstances.

Contact Lorenzo Law for Your Florida Estate Tax Strategy

Navigating the transition of wealth can feel overwhelming, especially with the 2026 federal changes. Many clients come to us asking, “is there an estate tax in Florida?” or “is there an inheritance tax in Florida?”

While the answer to both is a resounding “No,” the federal obligations can still be a significant burden without a plan in place.

Whether you are wondering does Florida have an inheritance tax for out-of-state property or you need to know exactly what is Florida estate tax exposure for your specific business, we at Lorenzo Law are here to help.

We provide clarity on the inheritance tax FL landscape and help you minimize your FL estate tax liability through strategic trust planning and gifting.

Does Florida have an estate tax? No.

Does Florida have estate taxes hidden in the probate process? No.

But the IRS does. Don’t wait until the nine-month filing deadline is looming to protect your family’s legacy.

We Represent Clients Across Florida

We serve individuals and families in all major cities and counties, providing local expertise with a statewide reach:

Miami-Dade County: Miami, Coral Gables, Hialeah, and Miami Lakes.
Broward County: Fort Lauderdale, Davie, Plantation, and Sunrise.
Central Florida: Orlando, Kissimmee, and The Villages.
West Coast: Tampa and surrounding areas.

Take the Next Step

If you are a Florida resident or have property located in the state, contact us today for a consultation.

We will review your assets, verify your estate tax exemption, and ensure your Personal Representative has a clear roadmap for the probate process in Florida.

We also help alleviate concerns surrounding inheritance tax FL, potential FL estate tax liability, and questions about does Florida have an inheritance tax, by explaining Florida’s tax protections while addressing any applicable federal estate tax planning considerations.

Contact Lorenzo Law today to develop a strategic estate plan that protects your legacy, minimizes tax exposure, and ensures your assets transfer to your loved ones exactly as you intend.

Inheritance Tax FL: Florida Estate Planning