There’s a popular saying that the only things certain in life are death and taxes. Estate planning exists at the uncomfortable intersection between those two inevitable life experiences. For most people creating an estate plan, the primary objectives are to structure their legacy and protect their dependents.
Many people don’t stop to think about the stresses and risks that result from estate taxes when initially planning their estate or creating their last will. You want to address those issues now so that your legacy won’t be an incredible financial burden on the people you love.
Florida doesn’t assess estate taxes, but the federal government does
Only a handful of states assess individual estate taxes. Florida is not one of them. That means that you don’t have to worry about a requirement for your heirs to pay taxes to the state of Florida, regardless of how many assets you have in your estate.
However, the federal government does assess estate taxes. Individuals with an estate valued at over $11,400,000 in 2019 or $11,580,000 in 2020 will be subject to an estate tax. The higher the overall value of the estate, the greater the percentage of a state tax the beneficiaries have to pay.
Strategize now to reduce the potential estate tax burden
If you know your estate will be at or close to the federal limit for estate taxes, planning to reduce the value of your estate can protect you and your loved ones. There are multiple strategies that you can use, including giving away assets before you die through a structured system to limit tax liability. You can also create a trust or even several trusts to help limit your estate’s tax obligations.
