What is the death tax, inheritance tax or estate tax amount in Florida

Attorney Tom Olsen: Jd, you're on Wdbo. Go ahead.

JD: Hi, Tom. I wanted to ask about inheritance taxes due. Are beneficiaries included in inheritance taxes or are they taxed differently?

Tom: Well, let me say it this way and see if you understand it, JD. Here in the state of Florida, generally when somebody inherits wealth from their parents or friend or family anyway, generally it is all tax-free. Why? because mom's got out, earn $15,000, pay Uncle Sam $3,000 in income taxes. She got 12,000 left over, she passes away, the kids inherit that 12,000. They're not going to pay income taxes on it because mom is already paid income taxes on it. Typically, when somebody dies here in the state of Florida, the only taxes are due are taxes on traditional IRAs.

If you got a traditional IRA, as you are paying income taxes on that that IRA as you withdraw it because you've never paid income taxes on it. If you pass away and your kids cash out your traditional IRA, they will pay income taxes on that money because you've never paid taxes on it. Otherwise, life insurance is tax-free. Otherwise, here in the state of Florida, every individual can pass up to $11 million free of death taxes, also known as estate taxes, also known as inheritance taxes. JD does that answer your question for you?

JD: I'm primarily worried about money as I have in a bank account that would pass as inheritance taxes which would be tax-free.

Tom: I'm saying when you pass away, your kids, every dollar in that bank account, your kids are going to receive. There'll be no taxes due to them or to your estate, JD.

JD: Even if it's a friend and not a family member.

Tom: It does not matter. It can be a friend, family member, stranger, you name it, it's going to be-- The same rules are going to apply.

JD: Thank you, Tom. I appreciate it, Tom. Thank you.

Tom: You're very welcome, JD. Holley, I've got to really update myself because I always talk about every individual can pass up to $11 million free of death taxes. A married couple can pass up to 22 million free of death taxes. That is going to change in 2025.

Attorney Holley Knapik: It is, it's going to as they say, sunset and revert back to, I believe it was the 5 million for a single, 10 million for married couples.

Tom: Somewhere in that vicinity. As we get closer to that date, I'm going to have to reinvestigate that issue. It's still a pretty high number.

Holley: It's still high. Typically our clients are under that amount.

Tom: Exactly. Most of the people who die here in the state of Florida because of that large amount of estate tax exemption, they're not going to-- No estate taxes are going to be due when they pass away. Holley, I don't know if I've ever told you, I've been a lawyer for 41 years in Orlando. Back in the day, the estate tax exemption was as low as 175,000, 250,000.

It has not always been like this. Back in the day, it was much more people were going to be subject to estate taxes, also known as death taxes, also known as inheritance taxes when they passed away. For them, we had to-- Right now when we talk about a single person's got 11 million, a married couple's got 22 million.

That married couple automatically gets that $22 million. They don't have to work for it or plan for it. It's automatically given to 'em. Back in the day to double the estate tax exemption let's say it was 250 for a single, 500 for a married couple. To get that, for that married couple to get a $500,000 exemption required work, it required that they literally have separate living trust and it required that they literally divide their wealth in two, half in his trust, half in her trust. Who wants to do that?

Holley: Do that work, right?

Tom: was a lot of work and not in the people's best interest. No. Married couples are used to owning everything jointly. They don't want separate their assets, divide 'em in two, but that was the old way of doing business. Things have got to better since then.

Holley: Yes, Progress. That's good to know.

Tom: Of course also, when the estate tax rates were that low, you not only did you have to get a lawyer involved, you really had to have a CPA involved because you had to really do-- You had some serious tax strategy to minimize your estate taxes, also known as death taxes, also known as inheritance taxes no longer required because of these large exemption amounts.

Holley: That makes a lot of sense.

Tom: Let's just be clear about it. You just heard that and say, what's Tom saying? We're saying this, that here in the state of Florida, every individual can pass up to $11 million free of death taxes, also known as estate taxes, also known as inheritance taxes. A married couple can pass up to $22 million free of death taxes. That's in place right now in 2025 or so that goes down to 4 or 5 million for a single, 9 or 10 million for a married couple. Most people are going to still way be under that amount.

Holley: Under that amount.

Tom: I hope you understand. If you're confused about that, you're welcome to give Olson Law Group a call here in Orlando. You can check us out at our website, olsonlawgroup.com. We're always welcoming legal questions via the website. If you got a legal question, feel free to call us. Remember all the lawyers at the Olson Law Group in Orlando we're always happy to give you a few minutes of free legal advice right over the telephone, Monday through Friday, nine to five. You can call us at (407) 423-5561--

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