When wealthy people die in Florida, law enforcement often looks at those close to them with some suspicion until investigations prove no foul play. Those who stand to benefit financially from the individual’s death often face the greatest suspicion. However, heirs are not the only ones who can expect a windfall after a billionaire dies.
CNBC estimates that a Forbes 400 billionaire’s death may bring in as much as $165 million for the state they resided in at the time of passing. This results from the taxes charged to the deceased’s estate. While D.C. and 12 states have these so-called “death taxes,” Florida is not one of them. Instead, Florida is one of the states the wealthy often flee to, to avoid not just income taxes but taxes on their estate after passing.
There is also a federal estate tax owed to the government from the ultra-wealthy. However, CNN reports that the recent tax reform doubled the estate value now immune from taxation for the people inheriting the estate. Unmarried individuals may see an exemption of up to $11 million, while married couples now enjoy an exemption of $22 million. This doubled exemption may remain in effect until 2025 when it is due for either an extension or may get replaced with another proposal.
To further circumvent the issue of heirs paying taxes on estates, many people start giving away their wealth while they are still alive. In the past, people could only give away $11 million as a couple or $5.5 million as an individual without owing taxes. Now, they may give away twice as much, while potentially not owing the government a penny.
Estate taxes are primarily aimed at the wealthy. This makes it an invaluable inclusion in estate planning and asset management.