Do you have your estate in order?

Estate planning isn’t just for the rich. These plans are critical for anyone that wants to protect their assets and ensure a transfer of wealth goes smoothly if they are no longer around. But, understanding the complexities of one and how to get it setup can be daunting.

This is especially true for residents of Florida, who have unique regulations and advantages only available to them that should be kept in mind when getting a plan together. Continue reading below where we’ve outlined these differences and how they could impact your plan.

1. No Estate or Inheritance Tax

Florida residents will be happy to know that there is no estate or inheritance tax applied to them at the state level. This is great news for those that want the full value of their money to be transferred to another and are worried that their loved ones won’t get it all.

2. Federal Estate Tax Still Applies

Although state tax won’t be applied to Florida residents trying to pass on their assets, federal estate tax is still charged. In addition to federal estate tax, additional federal charges could be applied to inherited accounts (like IRAs or 401Ks). So, if you have any of these assets and are concerned about the tax implications of transferring them, speak directly to an estate planner that will be able to review your situation and let you know how much tax will be applied.

3. Gift Tax Considerations

Floridians that are concerned about tax being put on assets they are passing on should consider gifting them while they are still alive. That’s because the things given as gifts will no longer be considered to be part of the estate. In turn, helping to reduce the tax liabilities of what is left behind.

It is important to note that the federal government does allow individuals to give up to $18,000 per recipient, per year as of 2024, without impacting their lifetime gifting exemption.

4. Homestead Protections

Another unique implication that residents of Florida should consider when forming an estate plan is the homestead laws that apply. These laws provide uniquely strong protection rights against a Florida person’s primary residence when they then die by having laws in place that shield it from creditors. There are also property tax exemptions that could be applied to the home which means your loved ones likely won’t be burdened with taxes and end up at risk of losing the home.

5. Trusts are Critical

If your estate is not in order and something happens to you, it will be up to your loved ones to go through the probate process. In Florida, the probate process is time-consuming and costly. This process often causes financial hardship, disagreements and resentment if people begin to fight over things they believe to be theirs.

To avoid this from happening to your loved ones, consider setting up a trust. A trust is designed to manage your assets on your behalf, so everyone knows exactly who is getting what, and without an additional charge.

6. Update Regularly

Laws and personal circumstances change often, so too should your estate plan. That’s why we suggest reviewing the documents every few years or when any major life events happen (like an illness, change in marital status, etc.). While reviewing, be sure to doublecheck the beneficiary designation on all your retirement plans, life insurance policies, and bank accounts or your assets could be transferred to the wrong person.

So, if you need help forming an estate plan, consider getting some professional help by speaking with us at 407-328-5001 or emailing us here.

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