J. Kelly Kennedy, Attorney/CPA, PLLC

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The importance of understanding estate taxes for Floridians

Federal and state laws often differ and being aware of the differences can be immensely helpful when planning an estate. For Florida residents, it is important to take note of both the federal and state estate tax laws. By understating estate taxes, Floridians can make sure their heirs inherit the maximum amount of assets possible under state law.

Some Floridians may be aware of what is known as an inheritance tax, but this tax does not apply to Florida residents. Florida has state estate taxes. This means that the tax is imposed on the whole estate before it is distributed -- as opposed to an inheritance tax, in which the heir pays the tax. Besides the state tax, federal taxes may also be imposed as well but usually only in situations involving estates with high amounts of monetary value. For example, individuals who leave behind anything less than $5.25 million are unlikely to face any federal taxes.

For those who live in more than one state, learning about the state laws in the locations of all properties is important for those hoping to maximize the benefits family and other beneficiaries will receive in an estate.

In many cases, it is possible for Floridians to lessen the amount they are required to pay in state estate taxes. Under Florida law, it is possible to minimize both federal and state estate taxes through estate planning. There are many nuances and intricacies involved, and by consulting with an expert, Floridians are able to make sure their families and beneficiaries receive the maximum amount of benefits possible with their estates.

Source: Chicago Tribune Business, "Understand laws to minimize estate tax for your heirs," Elliot Raphaelson, Nov. 5, 2013

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