Estate taxes can significantly reduce the wealth passed on to your heirs. While Florida doesn’t impose a state estate tax, federal estate taxes can still apply to estates exceeding the exemption threshold.
As of 2025, the federal estate tax exemption is $13.99 million per individual, or $27.98 million for married couples. Estates that exceed these amounts may face a federal estate tax rate as high as 40%.
Effective estate planning is essential to reduce tax burdens and preserve assets for your beneficiaries. Using legal strategies tailored to your circumstances, you can lower your estate’s value in the eyes of the Internal Revenue Service and potentially eliminate or reduce the estate tax owed.
At VIA Lawyers, we work closely with individuals and families in Miami, Florida, to implement planning tools that minimize estate taxes and protect their wealth. Our estate planning attorney provides strategic counsel to help clients plan for the future while preserving as much of their estate as possible.
Utilize Trusts to Reduce Taxable Estate Value
Trusts remain a cornerstone of effective estate tax planning. An estate planning attorney can help you determine which type of trust aligns with your goals. Transferring ownership of assets to a trust can remove them from your estate and lower the overall taxable amount.
Irrevocable Trusts
These trusts remove assets from your estate by permanently transferring ownership to the trust. Since the assets are no longer under your control, their value is excluded from your estate for tax purposes.
Irrevocable Life Insurance Trusts (ILITs)
By placing a life insurance policy in an ILIT, the death benefit is kept out of your estate. This is especially useful when policies are large enough to trigger estate taxes.
Qualified Personal Residence Trusts (QPRTs)
QPRTs allow you to transfer your home into a trust while retaining the right to live in it for a set period. Once that period ends, the home passes to your beneficiaries at a reduced tax value.
Take Advantage of Annual Gift Tax Exclusions
The Internal Revenue Service allows individuals to give up to $19,000 per recipient per year without those gifts counting against their lifetime exemption. Married couples can jointly gift up to $38,000 per recipient annually. These annual gifts reduce the size of your estate over time and aren’t subject to estate or gift taxes.
Consistently using the annual exclusion allows high-net-worth individuals to transfer substantial wealth tax-free over the years, particularly when combined with other estate planning tools.
Make Use of the Lifetime Gift and Estate Tax Exemption
In addition to annual exclusions, each person has a lifetime gift and estate tax exemption, which in 2025 is set at $13.99 million. This exemption applies to the total amount you can transfer during life and at death without incurring federal estate taxes.
Using this exemption effectively can allow you to:
Transfer valuable assets now, while their value may be lower.
Reduce the future appreciation that would otherwise be included in your taxable estate.
Lock in the current high exemption levels before they’re potentially reduced in future legislative changes.
For example, if you gift an asset worth $5 million today and it grows to $10 million by the time of your death, you have removed $10 million, not just $5 million, from your taxable estate. Strategically applying this exemption under the guidance of an estate planning attorney can have a powerful long-term tax impact.
Implement Estate Freeze Techniques
Freezing the value of appreciating assets limits the future growth of your estate and shifts that appreciation to your heirs.
Family Limited Partnerships (FLPs)
By transferring business interests or investment assets into an FLP, you retain control while gifting shares to family members. The transferred interest often qualifies for valuation discounts due to a lack of control or marketability, lowering the taxable value.
Grantor Retained Annuity Trusts (GRATs)
GRATs allow you to transfer appreciating assets into a trust while receiving an annuity payment for a term of years. Any remaining value after the term passes to your beneficiaries, often tax-free.
Intentionally Defective Grantor Trusts (IDGTs)
An IDGT can remove appreciating assets from your taxable estate while you continue to pay the income tax, reducing the estate’s overall value and effectively making additional tax-free gifts to beneficiaries.
Leverage Charitable Giving Strategies
Charitable giving offers estate tax advantages while allowing you to support meaningful causes.
Charitable Remainder Trusts (CRTs)
These trusts allow you or your beneficiaries to receive income for a term or for life, after which the remainder goes to a charity. The value of the charitable remainder reduces your taxable estate.
Donor-Advised Funds (DAFs)
By donating to a DAF, you receive an immediate income tax deduction and reduce your taxable estate. You can recommend grants to charities from the fund over time.
Consider the Portability of the Estate Tax Exemption
For married couples, portability allows the surviving spouse to use any unused portion of the deceased spouse’s federal estate tax exemption. To take advantage of this, a timely estate tax return must be filed, even if the estate is below the filing threshold. This strategy can preserve millions in tax exemption and requires close coordination with an estate planning attorney.
Plan for Retirement Accounts
Retirement accounts often represent a large portion of an estate’s value. While tax-deferred, these accounts can trigger significant tax consequences for heirs if not properly structured.
Here’s how to plan retirement accounts to reduce estate taxes:
Update beneficiary designations regularly to reflect your current intentions and make sure assets pass outside of probate.
Consider Roth IRA conversions to reduce the taxable value of the estate by paying income taxes during your lifetime instead of passing that burden to heirs.
Use trusts as beneficiaries where appropriate to maintain control over how distributions are made, especially for minors or individuals with special needs.
Minimize Required Minimum Distributions (RMDs) while you're alive by timing withdrawals strategically and coordinating with your overall estate plan.
Coordinate retirement assets with the rest of your estate plan to avoid overfunding one heir or increasing tax burdens unintentionally.
These steps can help reduce your estate’s overall tax exposure while maximizing what your heirs ultimately receive.
Regularly Review and Update Your Estate Plan
An estate plan should reflect your current wishes and circumstances. Regular reviews are essential after major life events, such as marriage, divorce, the birth of a child, the sale of a business, or a change in tax law. An estate planning attorney can provide the necessary legal guidance to adjust your plan and help you stay in compliance with federal regulations.
Our attorney at VIA Lawyers is committed to providing clients in Miami, Florida, with tailored estate planning strategies that minimize tax liabilities and protect family wealth.
Frequently Asked Questions
Do I need to worry about estate taxes in Florida?
Florida does not have a state-level estate tax, but federal estate tax laws still apply. If your estate exceeds the federal exemption amount, federal estate taxes may be owed.
How can I transfer wealth without paying estate taxes?
You can use the annual gift tax exclusion, establish irrevocable trusts, and utilize estate freeze techniques like GRATs and FLPs. These tools help remove assets and appreciation from your taxable estate.
What happens if I don’t plan for estate taxes?
Without planning, a large portion of your estate could go to the IRS instead of your heirs. This may force the sale of assets like family homes or businesses to pay taxes, potentially harming your legacy.
When should I start estate tax planning?
The earlier you begin, the more options are available to you. Lifetime gifting strategies and long-term trust structures often require several years to be fully effective.
Contact Us Today
Our estate planning attorney, Alejandro I. Velez, Esq.,at VIA Lawyers serves clients throughout Miami, Florida. If you want to preserve your estate and minimize unnecessary tax exposure, we’re here to help. Reach out today.
