When you die, the property you have left after your personal representative repays your creditors will become the legacy you leave for your loved ones. After a lifetime of hard work, you probably want to give the people you love as much as possible out of your estate.
Planning ahead for issues that would reduce what you leave behind is a smart move. Debts and Medicaid benefits could both diminish the overall value of your estate. So could estate taxes. Do you need to have a special plan in place to minimize how much your loved ones pay in estate taxes?
Florida does not assess a state estate tax
An estate tax applies to the value of someone’s estate when they die. An inheritance tax applies to the value of what an individual receives from a deceased loved one. Florida does not assess either an inheritance tax against your beneficiaries or an estate tax against your assets.
However, the assets in your estate are still subject to federal estate taxes. Any estate worth more than the current tax cut-off of $11.7 million will usually have to pay estate taxes. The more the estate exceeds that exemption threshold, the higher the tax rate that will apply to your estate. The maximum estate tax rate is 40%.
There are numerous ways for you to minimize how much of your legacy goes to the government, but you will have to plan ahead to minimize your estate tax risks. Learning more about the liabilities that could affect your estate can help you plan to avoid them.