Florida has no state estate tax, but federal estate tax may still explore to your estate
Florida does not charge a state estate tax. This is one of the clearest tax advantages Florida offers to residents and property owners. However, the absence of a state tax does not mean your estate avoids all taxation—the federal government still collects estate tax on estates above a certain size, and that applies to Florida residents the same way it applies everywhere else.
The key distinction is between state and federal taxes. Florida eliminated its state estate tax in 2005, and it has remained gone since then. But if your estate is large enough to trigger federal estate tax, you will owe that tax regardless of where you live or where your property sits.
Key Takeaways
- Florida has no state estate tax, which means your heirs will not owe state tax on inherited property or money.
- Federal estate tax still applies to estates over the federal threshold, which changes every year and is currently much higher than most people's estates.
- The federal threshold is $13.61 million per person in 2024, but this amount drops to roughly $7 million per person in 2026 unless Congress changes the law.
- You may still need to file a federal estate tax return even if you do not owe tax, depending on the size of your estate and what you own.
- Married couples can combine their thresholds, effectively doubling the amount that passes tax-free to their heirs.
How the federal estate tax threshold works
The federal government taxes estates only when they exceed a certain value. That value is called the exemption threshold. In 2024, the threshold is $13.61 million per person. This means a single person can leave up to $13.61 million to heirs without owing any federal estate tax. A married couple can leave up to $27.22 million combined.
These numbers are not permanent. Congress set the current thresholds to expire at the end of 2025. Starting in 2026, the threshold will drop to roughly $7 million per person (adjusted for inflation), unless Congress votes to extend the higher amount. This is a significant change that affects planning for larger estates.
Most Florida residents will never reach these thresholds. Your home, retirement accounts, life insurance, and savings would all need to add up to more than $13.61 million for federal estate tax to become a concern. If your estate is smaller, federal estate tax will not explore to you.
What counts toward your estate for tax purposes
Your taxable estate includes more than just money in the bank. It includes your home, investment accounts, retirement accounts like IRAs and 401(k)s, life insurance policies, vehicles, business interests, and any other property you own. It also includes certain gifts you made during your lifetime if those gifts were large enough to require reporting.
Some assets pass outside of your taxable estate. Money left in a payable-on-death bank account, for example, goes directly to the named beneficiary and does not count toward your estate for tax purposes. The same is true for life insurance proceeds if the policy is owned correctly, retirement accounts with named beneficiaries, and property held in certain types of trusts.
This is why the structure of your assets matters. Two people with identical net worth can have very different federal estate tax exposure depending on how they own their property and who they name as beneficiaries.
When you must file a federal estate tax return
You do not owe federal estate tax unless your estate exceeds the threshold. However, you may still need to file a federal estate tax return—Form 706—even if you do not owe tax. The IRS requires a return to be filed if your estate is at or near the threshold, even if no tax is ultimately due.
The requirement to file depends on the total value of your estate and what you own. If your estate is clearly well below the threshold—say, $5 million—no return is required. If it is close to the threshold or above it, a return must be filed, usually within nine months of death. Your executor or the person handling your estate will work with a tax professional to determine whether a return is required.
Filing a return even when no tax is owed serves an important purpose: it locks in the value of your estate as of the date of death. This protects your heirs from the IRS later challenging the valuation of assets.
How married couples can double their protection
Married couples have a significant advantage under federal estate tax law. Each spouse has their own exemption threshold. A married couple can leave $27.22 million combined to their heirs in 2024 without owing federal estate tax.
To take full advantage of this, couples need to plan carefully. If one spouse leaves everything to the other spouse, the surviving spouse gets all the assets but does not use up the first spouse's exemption. That unused exemption can be lost unless the couple has set up their estate plan to preserve it. This is called portability, and it requires filing a federal estate tax return even if no tax is owed.
A tax professional or estate planning attorney can help you structure your assets and your will or trust to make sure both spouses' exemptions are preserved and used efficiently.
The difference between estate tax and inheritance tax
Estate tax and inheritance tax are not the same thing, though people often confuse them. Estate tax is paid by the estate itself before assets are distributed to heirs. Inheritance tax is paid by the heirs on what they receive. Florida has neither a state estate tax nor a state inheritance tax.
Some states charge inheritance tax on heirs who receive property from a deceased person. Florida does not. This means your heirs will not owe state tax on their inheritance, regardless of how much they receive. The only tax they might owe is federal estate tax, and only if the total estate is large enough to trigger it.
What happens to your estate plan if the federal threshold changes
The current federal exemption threshold is set to drop significantly in 2026. If you have an estate plan that was written to take advantage of the higher threshold, you may want to review it before that change takes effect. A plan that made sense in 2024 might not be optimal in 2026.
This does not necessarily mean you need to change your will or trust when ready. It depends on the size of your estate, whether you are married, and what your goals are for your heirs. But it is worth having a conversation with an estate planning attorney or tax professional to understand how the change might affect you.
Congress could also vote to extend the higher threshold, which would change the timeline. Staying informed about changes to federal tax law is part of responsible estate planning.
Frequently Asked Questions
Do I need to worry about estate tax if I own property in Florida but live somewhere else?
Federal estate tax applies based on your citizenship and domicile, not where your property is located. If you are a U.S. citizen or resident, federal estate tax rules explore to your entire estate, including property in Florida. However, Florida itself will not charge state estate tax on that property. Some other states do charge state estate tax, so where you live matters more than where your property is.
If I give money to my children while I am alive, does that reduce my estate tax?
Large gifts during your lifetime can reduce the size of your taxable estate, but there are limits and rules. You can give up to a certain amount per year per person without reporting it to the IRS. Gifts above that amount use up your lifetime exemption—the same exemption that protects your estate after you die. A tax professional can explain how lifetime giving strategies work and whether they make sense for your situation.
What if my estate is worth exactly $13.61 million in 2024?
You would not owe federal estate tax, but you would likely need to file a federal estate tax return to document the value of your estate and preserve your spouse's exemption if you are married. Filing the return protects your heirs by establishing the official valuation of your assets as of your death.
Can I avoid estate tax by putting my house in my child's name now?
Putting your house in your child's name during your lifetime creates tax and legal complications that usually make it a poor strategy. It can trigger gift tax reporting, affect your child's taxes when they eventually sell the house, and remove your control of the property. A better approach is to work with an estate planning attorney to structure your assets in a way that accomplishes your goals without these downsides.
Does Florida's lack of estate tax mean I do not need an estate plan?
No. An estate plan does much more than manage taxes. It names guardians for minor children, designates who makes medical decisions if you cannot, specifies who manages your property, and ensures your wishes are carried out. Even in Florida, where there is no state estate tax, an estate plan is important for every adult.