As Florida resident who is also the recipient of an estate, you will need to handle the estate taxes. You may be wondering what taxes, if any, you are personally responsible for covering. Matters of estate taxes can be quite complex, after all.
Florida residents who are the recipient of an estate will likely have to deal with some form of estate tax, whether it's a death tax or an inheritance tax. But are there ways that you can reduce said taxes? We at the Law Offices of Frye & Vasquez, P.L., will walk you through your options.
Many people in Florida do not need to worry about their survivors paying estate tax after they die because they do not possess property/assets of sufficient value. However, if you are someone whose family members may be subject to an estate tax after you are gone, you need to understand how the Internal Revenue Service classifies your assets.
As of January 2019, the federal Tax Cuts and Jobs Act officially became law and introduced sweeping changes affecting taxpayers in Florida. Provisions of the law can affect your existing estate plan in many different ways, so much so that it may be necessary to update or revise the plan you have in place. The most obvious provision pertaining to your plan is the increased estate tax exemption, but, according to The CPA Journal, the new law also affects insurance, investment locations and other decisions related to financial planning.
If your estate exceeds a certain value at the time of your death in Florida, your heirs will have to pay an estate tax on it. Some people claim that this is not fair because it taxes the assets twice. The argument goes that the decedent paid income tax on the money upon initially earning it, and therefore, it is not fair to tax it again when the heirs receive it.
When creating an estate plan, it is important to think of ways you can pass on your inheritance without having to pay a host of taxes on your assets and possessions. Once you pass on, all of the things you have worked hard to amass, including your life insurance benefits, are distributed to the beneficiaries that are named in your last will and testament. There are however, ways that taxes can affect the overall amount of the life insurance policy and what is left to distribute to beneficiaries.
Whether you are a lifelong resident of Florida or you wish to make the Sunshine State your new home post retirement, it is important that you understand the various taxes your estate beneficiaries will have to pay upon your passing. Fortunately, there is not much to understand, as Florida does not levy estate taxes, or many taxes for that matter.
Even with tax cuts regularly in the news and media cycles, many Florida [BW1] residents fail to understand exactly how the changes will affect them and their estate, specifically in relation to the gift tax. A gift is considered a transfer of money to another person or party without anything in return, according to the Internal Revenue Service. These gifts are taxed at certain rates and with different limits, and those have recently changed.
Many Florida residents may know that after they die, their estate might be subject to an estate tax. However, they may not realize that sometimes their loved ones might need to pay an inheritance tax.
As a Florida resident who worked hard to create a lasting legacy, chances are, you drafted an estate plan with the hope that doing so would allow you to maximize the amount you were able to leave behind for your loved ones. At the Law Offices of Frye & Vasquez, P.L., we understand that reducing the amount of tax assessed against your estate is an effective method of maximizing what you can leave behind. We also have considerable experience in helping clients accomplish this and many related estate planning endeavors.