An Overview of Estate Taxes in Florida (Your Guide for 2020)
One of the primary purposes of estate planning is to make sure that you are able to leave as much money, assets, and property as possible for the benefit of your loved ones. You worked hard for life savings. Most likely, you want to find a way to protect your assets from avoidable tax liability. You may be wondering: What is the current estate tax rate in Florida? Here, our Tampa estate planning attorneys answer the question by explaining the key information that people should understand about estate taxes in Florida in 2020.
What is an Estate Tax?
An estate tax is a tax on the transfer of the estate of a deceased person. Sometimes colloquially referred to by the short hand “death tax”, an estate tax applies to property transferred via will or through a state’s intestacy laws. While many people are worried about the estate tax, there is good news: In 2020, relatively few taxpayers are subject to the estate tax. In fact, the Tax Policy Center estimates that fewer than 1 in 1,000 people who pass away in 2020 will have any estate tax liability.
State Law: No Estate Tax in Florida
In some jurisdictions, an estate may be subject to a state-based estate tax. Fortunately, Florida is not one of these states. As explained by the Florida Department of Revenue, state-based estate tax liability was eliminated in Florida back in 2004. In other words, Florida will not apply an estate tax after a state resident passes away.
Federal Law: Estate Tax Applies Above $11.58 million
While Florida does not have a state-based estate tax, there is still a federal estate tax. Though the federal estate tax is currently in a temporary state of flux. As was mentioned previously, the federal estate tax only applies to a relatively small number of estates. One of the provisions of the Tax Cuts and Jobs Act (TCJA) was to (temporarily) increase the federal estate tax exemption.
In 2020, the estate tax exemption is $11.58 million. In other words, estates valued at less than $11.58 million should not incur estate tax liability. For every dollar beyond that amount, federal estate tax liability will be incurred. The top statutory estate tax rate is 40 percent—though very few estates will be subject to an effective tax rate anywhere near that high. Further, there are asset protection strategies available to help high net worth individuals limit their estate tax exposure.
Contact Our Tampa, FL Estate Planning Lawyers for Help
At Bubley & Bubley, P.A., our Florida estate planning team is dedicated to providing sophisticated, reliable strategic guidance to clients. Our estate planning services are truly comprehensive. If you have concerns about estate taxes, we are available to help. For an entirely confidential consultation with an experienced estate planning lawyer, please contact our law firm now. We represent clients in Tampa and throughout Hillsborough County, including in Brandon and Riverview.