Florida residents pay no state estate tax or inheritance tax, because the Florida Constitution (Article VII, Section 5) bars the legislature from imposing one. What can still reach a Florida estate is the federal estate tax, which applies a top rate of 40% to the value of an estate above the federal exemption ($15 million per person in 2026). For physicians, business owners, and other high earners, the planning question is therefore not whether Florida will tax the estate, but how to use lifetime gifting and the federal exemption before death so that less of the estate is exposed.
I have sat across the table from a lot of North Miami professionals who assumed that moving to Florida solved their estate tax problem. For most of them, it largely did. But the doctor with a paid-off home in Bal Harbour, a brokerage account, a 401(k), a piece of a surgical practice, and a term policy with a $5 million death benefit can cross the federal line faster than expected. Life insurance owned outright counts. Retirement accounts count. The appreciation you haven’t realized yet counts. This article walks through what actually applies to Florida residents in 2026 and the gifting strategies that move the needle.
Does Florida Have an Estate Tax or Inheritance Tax?
No. Florida repealed its estate tax effective for deaths after December 31, 2004, when Congress phased out the federal credit for state death taxes that the Florida “pick-up” tax was tied to. There is also no separate Florida inheritance tax, which is a tax on the person who receives property rather than on the estate itself. Florida has never had one, and the state constitution would require a voter-approved amendment to bring either tax back.
The practical effect: a Florida decedent’s estate files no state estate tax return. If you previously lived in a state with its own estate tax — New York, for instance, with its own exemption and its notorious “cliff” — establishing genuine Florida domicile is itself an estate planning move. Genuine is the operative word. Spending the winter here is not the same as making Florida your domicile, and an aggressive former home state may contest it.
What Florida Residents Still Owe: The Federal Estate Tax
The federal estate tax is a unified system. The same exemption covers both lifetime gifts and transfers at death, which is why estate and gift planning are really one subject. Under the law that took effect January 1, 2026 (the exemption was set by the 2025 federal tax act, sometimes called the One Big Beautiful Bill Act), the key 2026 figures are:
- $15 million — the federal estate and lifetime gift tax exemption per individual.
- $30 million — the combined exemption available to a married couple with proper planning or portability.
- $19,000 — the annual gift tax exclusion per recipient, per donor (a married couple can “split” gifts to reach $38,000 per recipient).
- 40% — the top marginal federal estate and gift tax rate on amounts above the exemption.
Unlike the earlier exemption, which was scheduled to fall by roughly half after 2025, the 2026 amount is set as a permanent baseline that indexes for inflation going forward. That removed the “use it or lose it” deadline that drove so much rushed planning in 2024 and 2025. It did not remove the reasons to plan. A Florida estate worth $40 million is still going to owe federal tax in eight figures if nothing is done, and the assets most professionals hold — a practice, real estate, concentrated stock — are exactly the assets that appreciate and create that exposure.
The Annual Gift Tax Exclusion: The Quietest Strategy That Works
The single most underused tool I see is the annual exclusion. In 2026 you may give up to $19,000 to as many separate individuals as you like, every year, with no gift tax return and no use of your lifetime exemption. A married couple can give $38,000 per recipient through gift splitting. These gifts leave your taxable estate immediately, and so does all of their future growth.
Run the arithmetic for a physician with three adult children and four grandchildren. That is seven recipients. At $38,000 per recipient, a married couple moves $266,000 out of the estate in a single year — completely outside the exemption — and can repeat it annually. Over a decade that is more than $2.6 million transferred, plus the appreciation those dollars would otherwise have generated inside the taxable estate. Nothing about it requires a complicated structure.
Direct Payments for Tuition and Medical Care
Two categories of gift do not count against the annual exclusion or the lifetime exemption at all, and they are made for the families this site serves:
- Tuition paid directly to an educational institution. Pay the medical school or the private academy directly — not the student — and the payment is excluded without limit.
- Medical expenses paid directly to the provider. A parent or grandparent can cover a procedure, a hospital bill, or health insurance premiums for another person, again with no cap, as long as the money goes straight to the provider rather than to the patient.
A grandparent funding a grandchild’s medical residency tuition and another grandchild’s surgery, paid directly, can move very large sums out of the estate that never touch the exclusion or the exemption. Physicians, who understand both the tuition and the medical sides intuitively, tend to like this one once they see it.
Larger Lifetime Gifts and the Strategy Behind Them
Annual exclusion gifts are a steady drip. Larger strategies aim to remove substantial value — and its future appreciation — while you are alive, using a portion of the $15 million exemption today rather than letting the assets grow inside your estate.
Irrevocable Trusts
An irrevocable trust lets you make a completed gift while keeping the assets out of a beneficiary’s hands until you choose. A common version for parents funding life insurance is the irrevocable life insurance trust (ILIT). Because Florida professionals so often carry large policies, this matters: if you own a $5 million policy outright, that full death benefit is in your taxable estate. Move ownership to an ILIT and structure it correctly, and the proceeds pass to your heirs free of estate tax. The trade-off is the loss of control over the policy, which is exactly what removes it from the estate.
Grantor Retained Annuity Trusts and Family Entities
For owners of appreciating assets — a stake in a practice, commercial real estate, a concentrated equity position — a grantor retained annuity trust (GRAT) can pass future growth above an IRS-set hurdle rate to heirs at little or no gift tax cost. Family limited partnerships and LLCs serve a related purpose, consolidating management of a family business or real estate while supporting valuation discounts for the minority, non-controlling interests gifted to the next generation. These are sophisticated structures with real compliance requirements, and they are not do-it-yourself projects. Done carelessly, they invite an IRS challenge; done correctly, they are among the most powerful tools available.
Spousal Planning and Portability
A married couple’s most basic move is making sure both exemptions get used. The unlimited marital deduction lets one spouse leave everything to the other tax-free, but that can waste the first spouse’s $15 million exemption if it is not preserved. “Portability” — electing on a timely federal estate tax return to carry the deceased spouse’s unused exemption to the survivor — protects it. Credit shelter (bypass) trusts accomplish a similar goal and add asset protection. Which approach fits depends on the size and composition of the estate, and on whether the couple wants the survivor to control the assets outright.
Florida-Specific Considerations Professionals Overlook
A few Florida realities reshape this planning:
- Homestead protection. Florida’s constitutional homestead exemption protects the primary residence from most creditors and carries its own restrictions on how it can be devised when a spouse or minor child survives. It interacts with your trust planning in ways that surprise people who move here from other states.
- The elective share. A surviving spouse in Florida is entitled to 30% of the “elective estate” under the Florida Probate Code (Chapter 732), which can override what a will or trust says. Gifting and trust plans have to account for it.
- Domicile proof. If you relocated from a high-tax state, document the change — Florida driver’s license, voter registration, homestead filing, time actually spent here. Your former state’s revenue department may look back.
- Non-citizen spouses. The unlimited marital deduction does not apply to a non-U.S.-citizen spouse without a qualified domestic trust (QDOT). South Florida’s international families run into this constantly.
Because these federal strategies and state-law rules are identical in substance across our offices, families who own property or have heirs in multiple states often coordinate planning between jurisdictions. Our colleagues handle the New York side of these issues, including , and the foundational documents such as a properly drafted . On the Florida side, our team focuses on integrated , so that the gifting plan, the trusts, and the will all point in the same direction.
Putting a Plan Together
For most professionals and physicians, the sequence looks like this. Start with the foundation documents — a will, a revocable living trust to avoid probate, powers of attorney, and a health care directive. Layer in annual exclusion gifting and direct tuition and medical payments, which cost nothing in exemption and compound year after year. Then, if the estate is large enough to face federal tax, evaluate the heavier tools: an ILIT for life insurance, a GRAT or family entity for appreciating assets, and proper spousal exemption planning. Review it whenever your net worth, your family, or the law shifts — and the law shifts often.
To get started on the documents and a gifting plan tailored to your estate, see our overview of wills and trusts, learn how the Florida probate process affects what you leave behind, or contact our North Miami office for a consultation. The cost of planning is small next to a 40% federal tax that careful gifting could have avoided.
This article is general information, not legal advice. Estate and gift tax planning depends on your specific facts; consult a qualified Florida estate planning attorney before acting.
Frequently Asked Questions
Does Florida have an estate tax or inheritance tax in 2026?
No. Florida has no state estate tax (repealed for deaths after December 31, 2004) and no inheritance tax, and the Florida Constitution prohibits the legislature from imposing either without a voter-approved amendment. Florida residents can still owe federal estate tax on estates above the $15 million per-person federal exemption.
How much can I give away tax-free each year in Florida?
In 2026 you can give up to $19,000 per recipient per year under the federal annual gift tax exclusion, to as many people as you like, with no gift tax return required. A married couple can split gifts to reach $38,000 per recipient. Tuition paid directly to a school and medical expenses paid directly to a provider are excluded entirely, with no dollar limit.
What is the federal estate tax exemption for 2026?
The federal estate and lifetime gift tax exemption is $15 million per individual for 2026, or up to $30 million for a married couple with proper planning or portability. Amounts above the exemption are taxed at rates up to 40%. This figure was set as a permanent, inflation-indexed baseline by the 2025 federal tax law and took effect January 1, 2026.
Will moving to Florida reduce my estate tax if I came from a high-tax state?
It can eliminate state-level estate tax, since Florida imposes none, whereas states like New York have their own estate tax with a separate exemption. But you must establish genuine Florida domicile — driver’s license, voter registration, homestead filing, and time actually spent here — because your former state may contest the change. Federal estate tax still applies regardless of which state you live in.
Does life insurance count toward my taxable estate in Florida?
Yes, if you own the policy. A death benefit you control is included in your federal taxable estate, which can push a Florida professional over the exemption unexpectedly. Transferring ownership to an irrevocable life insurance trust (ILIT), if structured correctly, can keep the proceeds out of your taxable estate while still benefiting your heirs.
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For more on our Florida practice, see our overview of powers of attorney in Florida. Morgan Legal Group's affiliated New York office also handles .