Estate Tax Planning Strategies for Florida Residents

Florida’s tax-friendly environment makes it an appealing place to build and preserve wealth. With no state income tax and no estate or inheritance tax, it’s easy to see why so many retirees choose to call Florida home.

But there’s an important piece of the picture you can’t overlook: the federal estate tax. It’s important to understand how it applies and whether your estate may be impacted.

Estate planning should be as dynamic as your life – focused on safeguarding your wealth, caring for those you love, supporting the causes you value and staying flexible for the future. Here’s how Florida residents can start preparing for potential estate tax changes today.

ESTATE TAXES IN FLORIDA: WHY FEDERAL RULES STILL MATTER

Florida’s lack of a state estate or inheritance tax is a significant advantage for residents focused on preserving wealth. But even in a tax-friendly state, federal estate tax rules can still have a major impact on larger estates.

In 2025, the federal estate tax exemption is $13.99 million per person. For any estate value above this limit, the federal estate tax rate can reach as high as 40%.

By reviewing your plan, you can ensure it’s taking full advantage of today’s higher limits by implementing strategies to help preserve more of your wealth for the people and causes you care about.

STRATEGIES TO REDUCE YOUR ESTATE TAX EXPOSURE

Whether your estate is modestly above the exemption or well into high-net-worth territory, there are tools and strategies to help protect your wealth and your legacy.

MAKING STRATEGIC GIFTS DURING YOUR LIFETIME

Gifting while you’re alive is one of the most straightforward ways to reduce your taxable estate and share your wealth where it matters most.

In 2025, you can give up to $19,000 per recipient each year without dipping into your lifetime exemption. If you choose to make larger gifts, those amounts simply count against your lifetime limit – but they still help decrease the size of your taxable estate.

And the benefits go beyond taxes. Lifetime gifting allows you to experience the joy of seeing your impact, whether it’s helping a child launch a business, funding a grandchild’s education or supporting a loved one during a meaningful life milestone.

LEVERAGING TRUSTS FOR CONTROL AND PROTECTION

Trusts offer a flexible way to manage your estate, providing structure for how assets are distributed, shielding wealth from creditors and supporting philanthropic or family goals.

Some trust options to explore include:

• Irrevocable Life Insurance Trusts: Exclude life insurance proceeds from your taxable estate
• Grantor Retained Annuity Trusts: Transfer appreciating assets at reduced gift tax cost
• Qualified Personal Residence Trust: Gift a home at a reduced gift tax cost

Because each trust serves a specific purpose, it’s important to work with an estate attorney and an advisor who can help design a structure tailored to your needs.

COORDINATING STRATEGIES FOR MARRIED COUPLES

For married couples, portability can be a powerful estate planning tool. It allows the surviving spouse to use any unused portion of their partner’s federal estate tax exemption.

But portability isn’t automatic; it typically requires filing a timely estate tax return for the deceased spouse, even if no tax is owed. That’s why coordinating with your financial, legal and tax professionals is important to make sure you preserve this benefit.

In addition to portability, many couples consider strategies like credit shelter trusts (also called bypass trusts). These trusts help ensure that each spouse’s exemption is fully utilized, prevents unintentional disinheritance (for example, in blended families) and provides more control over how assets are distributed after the first spouse’s death.

Depending on your goals, you may also explore other planning techniques such as Qualified Terminable Interest Property trusts. These provide income for a surviving spouse while ultimately directing assets to other heirs and further customize how your wealth is managed and transferred.

When thoughtfully combined, these strategies can help married couples maximize available exemptions, protect family wealth and create a clear path for future generations.

THINKING LONG-TERM: MULTIGENERATIONAL PLANNING

If your goals reach beyond supporting your children, multigenerational planning can help build financial security that lasts well into the future.

Some popular strategies to consider include:

• Dynasty Trusts: Long-term trusts designed to protect family wealth from estate taxes and creditors while preserving assets for future generations
• Generation-Skipping Transfer Trusts: Vehicles that allow you to pass assets directly to grandchildren or other heirs, reducing the tax burden across generations
• Family Limited Partnerships: Structures that allow you to gradually transfer ownership of family businesses or real estate while maintaining control and potential valuation discounts

These tools can help ensure that your wealth isn’t just transferred – it’s preserved and managed for the benefit of generations to come.

GIVING BACK: CHARITABLE STRATEGIES WITH IMPACT

Incorporating charitable giving into your estate plan allows you to support causes you care about while also reducing your taxable estate.

Some ways to make an impact:

• Donor-Advised Funds: Make contributions now, receive an immediate tax deduction and direct gifts to charities over time
• Charitable Remainder Trusts: Provide a stream of income for yourself or heirs, with remaining assets going to charity
• Private Foundations: Establish a formal giving structure that engages your family in long-term philanthropy

Charitable planning can help you create a lasting legacy while maximizing the tax efficiency of your estate.

CREATING A PLAN THAT GROWS WITH YOU

Florida’s lack of a state estate tax makes planning simpler, but it doesn’t remove the need for a comprehensive strategy. With your financial circumstances likely to evolve, a well-structured, flexible plan can help protect your wealth today and adapt to what’s ahead.

At Edelman Financial Engines, we collaborate with you, your estate attorney and tax professionals to explore estate planning strategies that support your priorities, provide for your loved ones and reflect your vision for the future. Your legacy deserves careful planning. An advisor can help you with a financial plan that works for you now and for generations to come.