Florida imposes no state estate tax, inheritance tax, or gift tax, so the only transfer tax most Boca Raton residents need to plan around is the federal estate and gift tax. For 2025, each person can transfer up to $13.99 million during life or at death before that federal tax applies, and a married couple can shield roughly twice that with proper planning. The strategy, then, is not avoiding a tax most Floridians never owe — it is keeping appreciated real estate, brokerage accounts, and homestead property out of probate and out of reach of the federal tax for the small share of estates that approach the exemption.
I have sat across the table from a lot of Boca Raton homeowners who assumed “Florida is a tax-free state” meant they had nothing to plan for. It is half true, and the half that is missing is where families lose money. Let me walk through how estate tax actually works for a Florida resident, and where gifting fits in — especially when most of your net worth is tied up in real estate.
Does Florida Have an Estate Tax or Gift Tax?
No. Florida has no estate tax, no inheritance tax, and no gift tax at the state level. The Florida Constitution, in Article VII, Section 5, actually prohibits the state from levying an estate tax beyond the old federal “pickup” credit — and Congress phased that credit out years ago, which is why Florida’s estate tax effectively dropped to zero in 2005. You will not file a Florida estate tax return. There is no Florida equivalent of the inheritance taxes that states like Pennsylvania or New Jersey impose on the people who receive your property.
This is a genuine advantage, and it is one reason so many high-net-worth families establish Florida domicile. But residency is the wrong word to fixate on. What matters is domicile — your true, fixed, permanent home. Snowbirds who keep a New York apartment and spend five months a year up north can find their estate taxed by a former home state that argues they never really left. If you split time between Boca and the Northeast, nail down Florida domicile deliberately: file a Declaration of Domicile under Florida Statute 222.17, register to vote here, retitle vehicles, and update your driver’s license. A clean domicile trail is itself an estate-tax strategy when your old state has a tax and Florida does not.
The Federal Estate and Gift Tax Is the Real Concern
Federal law treats lifetime gifts and bequests at death as one unified system. You have a single lifetime exemption — $13.99 million per individual in 2025 — that covers both. Every dollar you give away during life that exceeds the annual exclusion chips away at the exemption you have left at death. Above that, the federal rate climbs to 40%.
Two features of that system shape almost every plan I draft:
- The annual gift tax exclusion. For 2025 you can give up to $19,000 per recipient, per year, to as many people as you like, with no gift tax return and no reduction of your lifetime exemption. A married couple can “split” gifts and move $38,000 per recipient annually.
- Portability between spouses. When the first spouse dies, the survivor can elect to carry over the deceased spouse’s unused exemption (the “DSUE”) by filing a federal Form 706. This is how a couple reaches roughly $28 million of combined shelter — but only if the return is filed. Skip it, and you can forfeit millions in exemption.
There is a deadline worth circling. The current high exemption is scheduled to sunset after December 31, 2025, dropping to roughly half — somewhere near $7 million per person, adjusted for inflation. For families above that threshold, the years immediately before the sunset are the window to use the exemption before it shrinks. Use it or lose it is not a slogan here; it is the statute.
Gifting Strategies That Work for Florida Real Estate Owners
Most of my Boca Raton clients are not cash-rich. They are real estate-rich — a homestead near the Intracoastal, a rental condo, maybe land they bought decades ago that has multiplied in value. Gifting strategy for that profile is different from gifting a stock portfolio, because real estate carries a basis problem.
Annual exclusion gifts and the basis trade-off
The annual exclusion is the simplest tool: hand $19,000 a year to each child or grandchild and watch the taxable estate shrink without paperwork. But before you gift appreciated property, understand the basis rule. Assets you give away during life keep your original cost basis — the recipient inherits your gain along with the asset. Assets that pass at death generally receive a stepped-up basis to fair market value, wiping out decades of capital gain.
So for a Florida resident whose estate is comfortably below the federal exemption, gifting appreciated real estate is often a mistake. You would trade a capital gains tax problem for an estate tax you were never going to owe. The homestead you bought for $200,000 and that is now worth $1.4 million should usually pass at death, basis stepped up, not be gifted in life.
Removing future appreciation with trusts
For larger estates, the smarter move is to freeze or remove the growth. A few structures do this well:
- Irrevocable Grantor Trusts. Transfer an asset into the trust and its future appreciation grows outside your taxable estate. You use exemption on today’s value, not tomorrow’s.
- Qualified Personal Residence Trusts (QPRTs). You place a home — sometimes the Florida vacation property, not the protected homestead — into a trust, keep living in it for a term of years, and pass it to your children at a discounted gift value.
- Grantor Retained Annuity Trusts (GRATs). Effective for assets expected to appreciate sharply, letting you pass growth to heirs with little or no gift-tax cost.
These tools are powerful and unforgiving — a botched QPRT term or a trust funded after a sunset deadline can undo the benefit. They belong in the hands of an attorney who drafts them regularly. For families with property in more than one state, coordination matters even more; out-of-state real estate can pull an estate into ancillary probate or another state’s tax regime. Our colleagues handle the New York side of exactly these issues, including , which is a common wrinkle for Boca residents who still own northern property.
Florida Homestead: A Shield, Not a Gifting Target
Your Florida homestead deserves its own conversation, because it does not behave like ordinary real estate. Under Article X, Section 4 of the Florida Constitution, your homestead enjoys near-unlimited protection from creditors — one of the strongest such protections in the country. That same constitutional provision restricts how you can leave it. If you are survived by a spouse or a minor child, you generally cannot freely devise the homestead however you wish; the spouse takes at least a life estate, with a remainder to descendants, unless waived.
This collides with gifting plans in ways people do not expect. Trying to gift or retitle a homestead during life can strip the creditor protection, trigger the constitutional devise restrictions, or even — if done carelessly with a non-spouse co-owner — create an uncapped property tax reassessment under Save Our Homes. The homestead is usually a property to protect and pass cleanly at death, not a property to gift. A properly drafted Lady Bird deed (an enhanced life estate deed, well established in Florida) can let the homestead pass to your heirs outside probate while you keep full control and your homestead tax benefits during life.
Wills, Trusts, and Keeping the Estate Out of Probate
Avoiding estate tax is only half the job. The other half is avoiding probate, which in Florida is a court-supervised process governed by Chapters 731 through 735 of the Florida Statutes. Probate is public, slow, and can be expensive — especially when an estate holds real estate in multiple counties or states.
A revocable living trust is the workhorse here. Fund it with your Florida real estate (other than homestead, which is handled with care) and your accounts, and those assets pass to your beneficiaries privately, without probate, on the terms you set. A pour-over will backs it up. Even clients who do everything through a trust still need a properly executed will — Florida’s requirements for a valid will are strict, and the document that controls guardianship of minor children lives in the will. If you want a clearer picture of how a will fits alongside a trust, this overview of a walks through the core principles, most of which translate directly to Florida practice.
Whether you need a simple will or a layered trust structure depends on the size and shape of your estate. Start by reviewing the basics on our wills page and our overview of Florida probate, then sit down with an attorney to map the right combination.
Common Mistakes Boca Raton Residents Make
- Gifting appreciated real estate to dodge a tax they never owed — forfeiting the step-up in basis and creating a capital gains bill.
- Assuming “no Florida estate tax” means no planning — and leaving a former home state free to tax a half-completed domicile.
- Failing to file Form 706 for portability after the first spouse dies, wasting millions in exemption.
- Retitling the homestead in life and accidentally losing creditor protection or triggering a tax reassessment.
- Waiting past the 2025 sunset to use the larger exemption that may be gone.
If your estate is comfortably under the federal exemption — which describes the great majority of Florida households — your plan should center on probate avoidance, homestead protection, and basis preservation, not aggressive gifting. If you are approaching the exemption, the calculus flips, and timing becomes urgent. The team at can help you tell which side of that line you are on, and our Boca Raton office is glad to start with a straightforward conversation. Reach out through our contact page to schedule a review.
Frequently Asked Questions
Does Florida have an estate tax or inheritance tax?
No. Florida has no estate tax, no inheritance tax, and no gift tax. The Florida Constitution prohibits a state estate tax beyond the old federal pickup credit, which was phased out in 2005. The only transfer tax a Florida resident may face is the federal estate and gift tax, which applies only to estates above the federal exemption ($13.99 million per person in 2025).
How much can I give away each year without owing gift tax?
For 2025, you can give up to $19,000 per recipient, to as many people as you want, with no gift tax and no gift tax return. A married couple can combine their exclusions and give $38,000 per recipient per year. Gifts above the annual exclusion reduce your lifetime federal exemption but rarely trigger an out-of-pocket tax until that exemption is exhausted.
Should I gift my Florida home to my children to avoid estate tax?
Usually not. Most Florida estates fall under the federal exemption, so there is no estate tax to avoid. Gifting an appreciated home during life forfeits the step-up in basis at death, leaving your children with a large capital gains tax. It can also strip homestead creditor protection and trigger a property tax reassessment. A Lady Bird deed or revocable trust is typically the better tool.
What is the federal estate tax exemption and is it changing?
For 2025 the federal estate and gift tax exemption is $13.99 million per person, with a 40% rate on amounts above it. Under current law, the exemption is scheduled to drop by roughly half after December 31, 2025. Families above the lower threshold should consider using the higher exemption before the sunset.
Do I still need a will if I have a living trust in Florida?
Yes. Even when assets pass through a revocable trust, you need a pour-over will to catch anything left out of the trust and, critically, to name guardians for minor children. Florida has strict execution requirements for a valid will, so both documents should be drafted and signed properly together.
Have a question about your estate?
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For more on our Florida practice, see our overview of Florida estate planning. Morgan Legal Group's affiliated New York office also handles .