If you’re a Florida resident or expecting to receive an inheritance from someone who lived in the state, you might be wondering how inheritance tax laws apply to you. The good news? Florida does not have a state inheritance tax or estate tax, making it one of the most tax-friendly states in the country for estate planning.
However, that doesn’t mean estate planning isn’t necessary. Federal estate taxes and the location of certain assets—especially those in other states—can still impact what you or your beneficiaries owe. This guide will walk you through how inheritance tax works, what to watch for, and how to protect your assets through proper planning.
What Is Inheritance Tax?
Inheritance tax is a tax that some state governments impose on beneficiaries who receive assets—such as money, property, or investments—after someone’s death. The amount due typically depends on:
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The value of the inheritance
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The heir’s relationship to the deceased
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The laws of the state where the deceased lived or owned property
In some states, close relatives like spouses and children are partially or fully exempt. Fortunately, Florida does not have an inheritance tax, so beneficiaries generally don’t have to worry about paying state tax on assets they inherit here.
Does Florida Charge Inheritance Tax?
No. Florida does not impose an inheritance tax. If someone passes away as a Florida resident, their heirs will not owe state taxes on what they inherit—regardless of the value of the estate or the relationship to the deceased.
This applies to all forms of inheritance, including real estate, cash, retirement accounts, stocks, and personal property.
Does Florida Have an Estate Tax?
Florida also does not have a state estate tax. Although it once had a tax linked to the federal system (known as the “pick-up tax”), that was eliminated in 2005.
Today, no matter the size of your estate, Florida will not tax it at the state level, making the state extremely appealing for individuals interested in passing on assets with minimal tax burden.
Do You Need to Worry About Federal Estate Tax?
While Florida doesn’t tax estates, the federal government still does—but only for high-value estates.
As of 2025, the federal estate tax exemption is about $13.6 million per person, or $27.2 million for a married couple. Estates that exceed these thresholds are subject to a federal estate tax, which can reach up to 40%.
If you have a high-value estate, working with a professional estate planner can help you implement strategies to reduce or eliminate federal estate tax exposure.
Estate Tax vs. Inheritance Tax: What’s the Difference?
These two taxes are often misunderstood. Here’s a simple comparison:
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Estate tax is charged on the estate itself before assets are distributed to heirs.
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Inheritance tax is paid by the individual receiving the inheritance after they receive it.
Florida has neither, but understanding the difference is important, especially if you’re dealing with multi-state properties or heirs living elsewhere.
What Happens if You Inherit Property in Another State?
Even if you live in Florida, you could be taxed if you inherit property from another state that imposes inheritance tax. For example, states like Maryland, Iowa, Nebraska, New Jersey, and Pennsylvania still have inheritance taxes in place.
In most cases, the tax is determined by the location of the property, not the residence of the beneficiary. If the estate includes real estate or business assets in another state, it’s worth consulting a tax or legal expert to determine your obligations.
Who Pays Inheritance Tax in Those States?
In states with inheritance tax, the beneficiary pays the tax, not the estate. Rates typically vary depending on the recipient’s relationship to the deceased:
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Spouses and close family members often pay nothing or a lower rate
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Distant relatives or unrelated heirs may face higher tax rates
While this doesn’t apply in Florida, it’s crucial to know your responsibilities if any assets are located outside the state.
Planning Ahead with Tax-Free Gifts
Even though Florida residents don’t face inheritance or estate taxes, proactive planning can help reduce potential federal estate tax liability. One effective strategy is annual gifting.
As of 2025, the IRS allows individuals to gift up to $17,000 per recipient, per year without it counting toward your lifetime exemption. These gifts can gradually reduce the size of your taxable estate while helping loved ones financially during your lifetime.
Essential Steps for Estate Planning in Florida
Just because Florida doesn’t impose these taxes doesn’t mean you can skip estate planning. A clear plan ensures your wishes are followed, minimizes delays, and protects your family from avoidable legal expenses.
✅ Create or Update Your Will
A valid, up-to-date will ensures your assets go to the right people and can simplify probate.
✅ Consider a Living Trust
Revocable living trusts are popular in Florida because they help bypass probate and provide flexibility in asset distribution.
✅ Name Beneficiaries on Key Accounts
Assets like life insurance, IRAs, and bank accounts should have beneficiaries listed to allow direct transfers without probate.
✅ Use Probate Avoidance Tools
Strategies like joint ownership, payable-on-death (POD), and transfer-on-death (TOD) designations can make asset transfers faster and easier.
✅ Work With a Professional
An experienced estate planning attorney or CPA can help you organize your assets, minimize federal tax exposure, and make sure your plan aligns with current laws.
What About Probate in Florida?
Florida does require probate for most estates, unless steps are taken in advance to avoid it. Probate is the legal process of validating a will and distributing assets, and it can take time and involve court fees.
By using tools like trusts and beneficiary designations, you can reduce or completely avoid probate—making things much easier for your heirs.
Final Thoughts
Florida’s lack of inheritance and estate taxes makes it one of the most favorable states for transferring wealth. However, federal estate tax laws and out-of-state property can still complicate matters.
By planning early, keeping your documents up to date, and consulting with professionals, you can make sure your estate is handled efficiently—and your loved ones are protected from unnecessary delays or costs.
Whether you’re building your estate plan or preparing to receive an inheritance, taking the right steps today will give you peace of mind for the future.
