A client forwarded me an article last week. Same client who forwards me an article every couple of months. The article was real. The estate tax it described was real. It just doesn’t apply to anyone who lives in Florida.
There is no Florida estate tax. There hasn’t been one in over twenty years. Florida’s estate tax was tied to the federal state death tax credit, and Article VII, §5(a) of the Florida Constitution caps any state estate tax at the federal credit amount. Once the federal credit was phased out for deaths after 2004, the cap dropped to zero and Florida’s estate tax disappeared with it. Bringing it back would require a constitutional amendment.
The financial press keeps writing about estate tax because the financial press writes for a national audience. Most of those readers live in states that still have an estate or inheritance tax: New York, Massachusetts, Oregon, Washington, Maryland, Illinois, and a few others. When you read “your heirs could owe six figures,” that’s the situation in those places. Not here.
What Changed Federally for 2026
The federal exclusion went up. A lot. As of 2026, you can die with $15 million per person before federal estate tax touches your estate. With proper planning, married couples get $30 million combined. The 2025 tax bill made the number permanent and indexed it to inflation, so it goes up every year.
Fifteen million is not just liquid assets. It’s everything. Your house. Your IRA. Your business. Your portfolio. The vacation property. All of it counts, and almost none of you are going to hit that number.
The annual gift exclusion for 2026 is $19,000 per person, per recipient, per year, likely $20,000 in 2027 with inflation. That is the amount you can give without filing a gift tax return at all. A married couple with three married kids who each have two children of their own can move $228,000 a year out of their estate without filing anything. Most clients who think they have a gift tax problem don’t. They have a record-keeping problem.
Who Actually Has a Federal Estate Tax Problem
If you have more than $15 million per person, come talk to me. The clients who genuinely need estate tax planning are family business owners with concentrated equity, founders sitting on appreciated stock, and people with substantial real estate portfolios. If you are one of them, you already know it.
For the rest of my Florida clients, federal estate tax is not the issue. The article that scared you was not written for you.
The One Trap
Here is the part the national articles don’t cover, and the part Florida residents miss. If you own real property in a state that does have an estate tax, that state can tax it at your death even if your driver’s license says Florida.
New York is the most common offender. The Manhattan apartment you kept after the move south is a New York estate tax asset. So is the Hamptons house. Massachusetts is the same. Oregon, Washington, Maryland: same answer. You are a Florida resident for income tax, but you own real property in a state that taxes estates, and the state where the dirt sits gets to look at the value of the dirt when you die.
The fix is structural and matter-specific. Sometimes it is an LLC. Sometimes it is a trust. Sometimes it is a sale before death and a different asset in its place. There is no template answer. But the issue is real, and snowbirds with property up north should not assume Florida residency solves it.
What Florida Residents Should Actually Plan For
Probate avoidance. Florida probate is slow, expensive, and public. Your kids pay the attorney’s fees, sit through hearings, and wait nine to eighteen months for a check. A revocable trust solves it. This is the single biggest reason most clients walk into my office, and it should be.
Incapacity. A durable power of attorney and a healthcare surrogate. If you don’t have these and something happens to you, your family is in court asking a judge to appoint a guardian over you. That outcome is worse than probate. Pay attention to what your power of attorney actually authorizes under Chapter 709: banks reject vague ones every day.
Family conflict. Blended families, second marriages, kids from prior relationships, the kid who took care of you versus the kid who didn’t. This is where the fights actually happen for ninety-nine percent of my clients. Not with the IRS. Inside the family.
A Side Note on Lifetime Gifting
When you die, the assets in your estate get a new tax basis equal to fair market value at death. Section 1014 step-up. That can wipe out decades of appreciation for your heirs.
Clients sometimes give appreciated property away during life to save estate tax and accidentally cost their kids the step-up. Below the $15 million exclusion, the math almost always favors holding the appreciated asset and getting the step-up at death over gifting it during life. Below the exclusion, lifetime gifting of appreciated assets is usually a bad trade.
The Bottom Line
If you live in Florida, your driver’s license says Florida, you spend more than half the year here, you sleep here, and your estate is under $15 million, you do not have a federal estate tax problem. You do not have a state estate tax problem.
What you may have is a probate problem, an incapacity problem, and a family conflict problem.
Plan for those. Stop letting articles written for someone else’s tax code scare you into a problem you don’t have.