Whether you’re planning your estate or you have a loved one that’s recently passed away, you’ve probably heard of a variety of taxes that may be due upon someone’s passing including inheritance, estate and death taxes. You should know the difference among all of these.
An estate tax is assessed by the federal government. Some states collect both an inheritance tax and an estate tax. Any taxes that someone is charged when they die are collectively referred to as death taxes.
Your heirs are generally responsible for paying estate taxes simply to be allowed to have your property transferred to them when you die. Both the state and federal tax authorities may assess a tax for this privilege. Florida does not impose a separate state estate tax from the federal government. There are more than a dozen other states that do so though.
The federal estate tax isn’t levied on a decedent’s entire estate. It’s instead assessed on any property that exceeds a certain threshold value. That amount was $11.18 million in 2018.
An inheritance tax is a state-imposed assessment. There are only six states that collect this. Florida is not one of them. Heirs in jurisdictions where this tax exists must pay a certain percentage of the value of whatever they inherit to the state to be allowed to have a decedent’s property transferred to them.
As you’re probably aware, taxes aren’t something that you want to play with. There can be stiff penalties for not paying what you owe.
If you’ve lived in other states aside from Florida, then you may be subject to paying taxes in those jurisdictions. This is why you should consult with an estate tax attorney that places an emphasis on personal attention and clear communication. Speaking with a Miami lawyer like this will help you make sure that you’re covering all of your bases.