SMA – Probate Lawyers Miami Florida

Estate Planning in Florida: Essential Tax Considerations to Know

Realizing the Importance of Tax Considerations

When engaging in estate planning, it's crucial to understand the various tax implications involved. Estate taxes can take a substantial bite out of your assets if not adequately managed. This article aims to shed light on some key tax considerations when planning your estate. 

Stokes McMillan Antúnez Martinez-Lejarza P.A. is a full-service Florida trusts and estates law firm providing services including, but not limited to, probate, estate planning, trust & estate administration, and trust and estate litigation. If you have any questions or wish to hire our firm, please contact us

Understanding Estate Taxes in Florida

When focusing on Florida estate planning, understanding state-specific tax regulations becomes essential. Floridian authorities don't levy any inheritance or estate taxes on residents or beneficiaries, but certain estate circumstances may warrant federal taxes. It is important to consult a skilled Florida estate planning attorney so you can navigate any estate taxes. 

Implications of Federal Estate Tax

While Florida doesn't levy any taxes on estates, the federal government taxes estates exceeding a specified value level. For many individuals, this tax isn't a concern thanks to the high exemption threshold. However, high net-worth individuals need to plan their Florida estate carefully to minimize the potential tax impact. 

Inheritance Tax Considerations in Florida

Under normal circumstances, Florida residents don't pay inheritance taxes on received assets. However, some specific situations can trigger taxable events for beneficiaries:

  • Withdrawals from retirement accounts: Unexpected tax liability may arise from withdrawals made from inherited retirement accounts. 

  • Income generation from inherited property: Income derived from inherited assets before their transfer might be subject to taxation. 

  • Sale of inherited property: Federal income taxes may apply on proceeds from selling inherited property after the original owner's passing. 

  • Inheritance from non-US citizens: Tax consequences could surface when inheriting property owned by non-US citizens. 

Benefiting of Hiring a Florida Estate Planning Attorney 

Effective estate planning strategies can help minimize or eliminate certain tax obligations upon death. A skilled Florida estate planning attorney can help you strategize and maximizes your benefits. 

Trusts as an Effective Tax Minimization Tool 

Irrevocable trusts serve as valuable tools for reducing potential federal estate taxes. By transferring ownership of assets into such a trust, they get excluded from the taxable estate. Remember, arrangement's permanence means relinquishing active control over the trust's assets. Revocable trusts, alternatively, don't gain any tax benefits, and their owners are deemed by IRS as still controlling the trust assets. However, these instruments offer other advantages like avoiding probate

Taking Advantage of Life Insurance Policies

Life insurance proceeds generally aren't subject to federal income taxes but may be viewed as part of the taxable estate. To circumvent this complication, transferring ownership of the policy or establishing an irrevocable life insurance trust could be considered. 


1. Does Florida levy estate or inheritance taxes?

No. Florida does not impose estate or inheritance taxes on its residents. 

2. Can inherited property be taxed if sold after inheriting?

Yes. If an inherited property appreciates in value after being inherited, the beneficiary may have to pay federal income taxes if they sell the property. 

3. Do retirement account withdrawals attract tax?

Withdrawals from inherited retirement accounts (401k, IRA) could result in taxable events post withdrawal. 

4. Does a revocable trust avoid federal estate tax?

No. The IRS deems that revocable trust creators still own and control their trust's assets; hence there are no resultant tax benefits. 

5. How can life insurance proceeds affect estate taxes?

If considered part of the taxable estate, life insurance proceeds may indirectly impact estate taxes; however, reassigning policy ownership or creating an irrevocable life insurance trust could mitigate this issue. 

Selecting an Estate Planning Attorney 

Understanding tax implications forms a crucial aspect of Florida estate planning. Wise utilization of available tools like trusts and life insurance policies can greatly aid in minimizing potential tax burdens. Remember: Knowledge is power when it comes to optimizing your legacy planning.

Stokes McMillan Antúnez Martinez-Lejarza P.A. is a full-service Florida trusts and estates law firm providing services including, but not limited to,probate, estate planning, trust & estate administration, and trust and estate litigation. If you have any questions or wish to hire our firm, please contact us


This article was partly generated by the use of artificial intelligence or AI, and is provided as general information for educational purposes only. This article is not intended to provide specific legal advice, and should not be relied upon as a substitute for competent advice from a licensed attorney. To speak with one of our attorneys all you have to do isclick here.If you’re interested in more in-depth ruminations on this area of the law written 100% by a live human being, visit the Florida Probate & Trust Litigation Blog by going to thehome page for firm partner Juan Antunez.

Scroll to Top