Florida is an attractive state for retirees, both for its pleasant year-round climate and its lack of state income tax. With income, retirement accounts, Social Security and pensions untaxed, there is little question as to why so many Americans choose to retire in Florida. However, as with all other planning elements of the later years, it is a good idea for citizens both young and old to understand the financial parameters of estate tax law at both the state and federal level. In this way, residents can more accurately plan and manage their affairs for the benefit of family members and beneficiaries.
According to Yahoo Finance, the state of Florida removed its estate tax laws in 2004. This frees up Floridians to deal with fewer legal hassles and provide more for their beneficiaries. Estate taxes are normally paid to the government when a person dies and their estate is evaluated. For this reason, they are sometimes colloquially known as “death taxes.” Also, though they may seem similar, estate taxes are not the same as income taxes.
However, though Florida does not have estate tax law at a state level, residents may still be required to pay federal estate taxes upon their deaths. Forbes outlines the key points of federal estate tax requirements at the current time, stating that recent amendments to the national tax code in 2018 have led to mass changes in how estates are handled in the country. Primarily, estates worth less than $11 million are exempt from having to pay federal estate tax. This regulation is due to shrink down to $5 million in 2026.