How are Estate Taxes Handled in Florida Probate?
It has been said that in life, only two things are quite certain: death, and taxes. But it is difficult to know what you just do not know, when we are planning our own estate plans, or trying to manage a loved one’s estate through the probate process. The last thing anyone wants to worry about is taxes. However, understanding how Florida and the larger federal government handles estate taxes through the probate process is important. And by keeping some key concepts in mind, you can empower yourself with knowledge of how such things will be handled.
Florida Estate Tax Basics
Understanding Florida’s and the federal government’s rules and processes regarding estate taxes are important in completing the probate process. Some key things to keep in mind include:
- Florida Does Not Have a State Estate Tax
Yes – Florida does not impose taxes on the transfer of assets that can occur after the owner has passed away. However – you should not take this to mean that no tax will be owed. Floridians are still subject to the federal government and the federal government CAN charge an estate tax. It is wise to consult with a legal professional to assess whether your estate might be subjected to taxation under the federal tax parameters.
- Federal Estate Tax
The federal government exempts estates that are valued below a certain threshold from the federal taxation. If the estate is valued above that threshold amount, the excess is taxed at a rate that can vary from 18-40%. While the current threshold stands at approximately 13.6 million per individual, those caps are scheduled to sunset in 2025. While the new amount/threshold has not yet been determined, it is forecasted to be about half the current amount. This means many more estates will newly fall into the federal taxable territory. Speak with an experienced wills and estate attorney to learn more.
Key Steps to Take
There are many key steps that testators should take while building their estate plan, in order to best plan for the future. These include:
- Valuing Estate Assets
Knowing what you have and what it is worth might be harder than it sounds. A true valuation should include analyzation of any real estate, investment, personal property, inheritances… if you account for all of your assets you will be able to make informed decisions on what to do with them and how best to handle them so they are passed down in a way that does not burden the beneficiaries/heirs.
- Research Potential Deductions and Credits
Estate tax liability can be reduced under a number of various credits and deductions. For example, married testators may take advantage of a marital deduction. Speaking with a legal advisor can help you understand what options might be available to you in your specific circumstances.
Engage with Experienced Legal Counsel
The Florida probate process is notoriously challenging. But it does not have to be. Working with an attorney experienced in the complications of estate tax law and the Florida probate process can ensure that you receive the guidance you need to ensure that your tax liability is minimized.
Contact Suncoast Civil Law
The knowledgeable Sarasota wills & probate lawyers at Suncoast Civil Law are standing by to help you with your case. Contact our office today.
Sources:
irs.gov/businesses/small-businesses-self-employed/estate-tax
usbank.com/wealth-management/financial-perspectives/trust-and-estate-planning/estate-taxes.html#:~:text=However%2C%20the%20estate%20tax%20exemption,individual%20(adjusted%20for%20inflation