Does Florida Have An Inheritance Tax?
A critical part of estate planning that is often overlooked is taxes. Many people spend much of life resenting taxes, unfortunately, however, they cannot be neglected in the afterlife either. With the proper planning though, you will have no problem making all necessary preparations so that you can have the peace of mind that comes with never having to worry about taxes again. In this article, we will review some tax considerations relevant to Florida residents. However, no two estates are entirely the same. If you have assets, such as homes or businesses, in other states, this may impact the applicability of the information below. The best thing to do if you want accurate insight on your specific financial situation is to speak directly to a West Palm Beach estate planning lawyer. If you would like personalized feedback on your case, you are welcome to reach out to Larry Bray to schedule a consultation.
Inheritance Tax in Florida
While many states have inheritance taxes, Florida does not. Florida also does not have a separate state estate tax. Some people are not aware that there is a difference, however, the difference between the two relates to who is responsible for paying the taxes on them. Estate taxes are paid by the estate before the assets are distributed to beneficiaries, while an inheritance tax falls to the person inheriting the asset. As noted above, Florida does not impose either of these taxes. If you have assets in other states which do, this may complicate your estate planning matters. Additionally, there is a federal estate tax, however, this will only affect very high-asset estates; and that’s a good thing too, because the federal estate tax rate begins at a shocking 40%. Luckily, this estate tax only applies to estates worth more than $11,580,000.00 per person. As you can imagine, few people meet this threshold. If you do, additional estate planning will be necessary to reduce the taxable value of your estate below the threshold to protect your estate for your beneficiaries. Just a few strategic financial moves by a Florida estates attorney could save you nearly half of your estate.
Taxing Inheritance as Income in Florida
The only other way that inheritance can result in taxation in Florida is when it counts as income. Most assets devised through a will inheritance process will not result in tax liability. However, some will. Common examples include money market accounts, IRAs, and 401Ks. These will not result in tax liability when they are inherited, and will not increase the recipient’s income simply by virtue of the individual receiving them, however, if the person withdraws any money from these accounts there will then be a tax penalty equal to what the previous owner of the account would have been subject to for the withdrawal. If you have specific questions about what inheritance may be taxable or if you are subject to tax liability, it is best to consult with an experienced attorney as soon as possible.
Talk to Larry E. Bray
If you need assistance with an estate planning matter, the Law Offices of Larry E. Bray are ready to help. With over 35 years of experience, Larry E. Bray has the expertise that you need to protect your interests and your loved ones for generations to come. Contact the Law Offices of Larry E. Bray to schedule your consultation today.