Does the State of Florida Take a Percent of Your Estate When You Are Deceased?

by Terry Masters

Estate planning is particularly important if you want to make sure that most of your wealth goes to your beneficiaries and not the state or federal governments. Florida has become a haven for retirees, so its estate tax laws tend to be more favorable than in many other states. Laws regarding death taxes often change on the state and federal levels. Florida, in particular, has changed its laws on estate taxes more than once in the past decade. It is important to check the current Florida estate tax rate that is in effect for the year the person died by visiting the estate tax section of the Florida Department of Revenue for the most current information.

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Definition

The taxes a person pays upon death are called estate taxes. These taxes are assessed on the value of the decedent's assets at the time of death. The tax is primarily applied at the federal level and is paid when the final tax return for the deceased person is filed. Some states also assess an estate tax on residents when they die. Federal and state estate taxes can eat up as much as half a person's assets or more, depending on the circumstances.

Florida Law

As of 2012, Florida does not assess an estate tax on the assets of the deceased. Prior to 2004, the state did assess a tax on estates with assets above a certain level. Changes to the federal estate and gift tax laws in 2004 closed the provision under which Florida was collecting this tax. As of that time, no resident who dies in Florida owes the state taxes on the assets of his estate. Florida does place an automatic estate tax lien on assets when a person dies, however, even though no taxes are owed. The deceased's personal representative must file an "Affidavit of No Florida Estate Tax Due" with the Florida Department of Revenue to release the lien.

Inheritance Tax

Some states tax the person who receives an inheritance, rather than the estate. This type of inheritance tax is another way that a state can deplete the money you leave to your beneficiaries. However, Florida does not currently have an inheritance tax.

Exceptions

If your estate goes into probate, the probate court will take 3 to 8 percent of your estate for fees and charges. The percentage can be much higher if your will is contested. Further, if you die without any recognized heirs, the state of Florida will take your entire estate by default.