If you have an elderly parent or parents who retired to Florida, you may wonder what you can do to help them with the estate planning process from across state lines. Though there are several ways in which you can assist with the financial planning process, one of the first things you can do is brush up on state law — or, more specifically, state tax laws. SmartAsset explores the various Florida estate tax laws.
Estate taxes are some of the most significant taxes of which individuals need to be wary when planning their estates. Estate taxes are taxes the government levies on the estate of a recently deceased individual. This tax is different than the inheritance tax, which the government levies on the money and assets passed to the heirs of the deceased. The good news is that Florida does not have an estate tax and has not since the legislature abolished it in 2004. The other good news is that the state also does not have an inheritance tax. What about gift taxes — will your loved one have to pay taxes on gifts? Again, the answer is no.
However, though the state does not levy estate, inheritance or gift taxes, the federal government does. The federal estate tax does not apply to many people, though, as it only kicks in for estates with a value of $11.18 million. As for gifts, the federal government begins taxing gifts when their value exceeds $15,000. If your elderly parents lived in another state prior to retiring to Florida, their home state’s inheritance tax may apply to them.
All in all, Florida is a very tax-friendly state. For further peace of mind, you should also know that it does not levy an income tax, which means zero taxation on your parents’ Social Security benefits, pension plans or retirement accounts.
This article is for educational purposes only. It should not be construed as legal advice.