There is no Florida estate tax, and there hasn’t been one for anyone who died on or after January 1, 2005. Florida also imposes no inheritance tax. The only wealth-transfer tax that reaches a Florida estate is the federal estate tax, and in 2026 that tax applies only to estates worth more than $15 million per person.1Internal Revenue Service. What’s New – Estate and Gift Tax For the vast majority of families, the real cost of settling an estate in Florida comes from probate fees, not taxes.
Why Florida Has No Estate Tax
Florida’s estate tax was never a standalone tax. It was a “pick-up” tax that collected whatever the federal government allowed as a credit for state death taxes. The estate paid the same total either way; Florida just claimed a share.2Florida Department of Revenue. Florida Department of Revenue – Estate Tax
Congress phased out the State Death Tax Credit starting in 2001 and replaced it with a deduction in 2005. Because Florida’s tax was built entirely on that credit, it disappeared with it. The legislature never enacted a replacement, and no state estate tax return exists to file.2Florida Department of Revenue. Florida Department of Revenue – Estate Tax
No Florida Inheritance Tax Either
An inheritance tax is different from an estate tax. It falls on the person receiving property, not the estate itself. Only a handful of states impose one, and Florida is not among them.2Florida Department of Revenue. Florida Department of Revenue – Estate Tax Beneficiaries of a Florida estate owe the state nothing simply for receiving an inheritance, regardless of the amount.
The Federal Estate Tax Still Applies
Florida residents are not exempt from the federal estate tax. In 2026, the exemption is $15 million per person, or up to $30 million for a married couple with proper planning. Anything above that is taxed at 40 percent.3GovInfo. 26 U.S. Code 2010 – Unified Credit Against Estate Tax
The $15 million figure reflects a recent change. The 2017 Tax Cuts and Jobs Act had roughly doubled the exemption, and those higher limits were set to expire at the end of 2025. The One Big Beautiful Bill Act, signed into law on July 4, 2025, made the expanded exemption permanent at $15 million for 2026, indexed for inflation going forward.1Internal Revenue Service. What’s New – Estate and Gift Tax
Filing and Deadlines
Estates over the exemption must file IRS Form 706 within nine months of the date of death.4eCFR. 26 CFR 20.6075-1 – Returns; Time for Filing Estate Tax Return Executors can request an automatic six-month extension by filing Form 4768 before the deadline, but that only extends the filing date. Payment is still due at nine months.5Internal Revenue Service. About Form 4768, Application for Extension of Time to File a Return and/or Pay U.S. Estate Taxes
Late penalties add up quickly. The failure-to-file penalty is 5 percent of unpaid tax per month, capped at 25 percent.6Internal Revenue Service. Failure to File Penalty A separate failure-to-pay penalty runs 0.5 percent per month, also capped at 25 percent.7Internal Revenue Service. Failure to Pay Penalty
Portability: Why Some Estates Should File Anyway
A surviving spouse can inherit the deceased spouse’s unused federal exemption. If the first spouse used only $3 million of their $15 million exemption, the remaining $12 million transfers to the survivor. This is called the deceased spousal unused exclusion, or DSUE.
Portability is not automatic. The executor has to file Form 706 and elect it on the return, even when the estate owes nothing and would not otherwise need to file.8Internal Revenue Service. Filing Estate and Gift Tax Returns Families who skip the filing because the estate seems “too small to matter” permanently lose the DSUE. On a $15 million exemption taxed at 40 percent, that can cost the surviving spouse up to $6 million when their own estate settles.
If the nine-month deadline was missed, a simplified late-election process is available under IRS Revenue Procedure 2022-32. Executors of estates that weren’t otherwise required to file Form 706 can make a late portability election by filing a complete Form 706 within five years of death, with a statement at the top identifying it as a portability election. After five years, the only remaining option is a private letter ruling, which is expensive and not guaranteed.
The Step-Up in Basis for Heirs
The most valuable tax break for Florida heirs is not the estate tax exemption. It’s the step-up in basis under Section 1014 of the Internal Revenue Code. Inherited property gets a new cost basis equal to its fair market value on the date of death.
Take a house a parent bought for $150,000 that was worth $600,000 at death. The heir’s basis resets to $600,000. If the heir sells for $610,000, capital gains tax applies to $10,000, not to the $460,000 that appreciated during the parent’s lifetime. The IRS treats all inherited property as held long-term regardless of how quickly it’s sold, so long-term capital gains rates apply even on an immediate sale. Where Form 706 is filed, the executor can elect an alternate valuation date six months after death, which can reduce taxable gain further if the asset declined during that window.
This is why holding appreciated assets until death is a common Florida planning strategy. Gifting that same $600,000 house during life would carry the original $150,000 basis to the recipient and produce a much larger tax bill on sale.
Other Taxes That Can Reach a Florida Estate
Federal Gift Tax
The federal gift tax shares the same $15 million exemption as the estate tax. Every dollar of lifetime gifts above the annual exclusion reduces what’s left to shelter the estate.1Internal Revenue Service. What’s New – Estate and Gift Tax For 2026, the annual exclusion is $19,000 per recipient, or $38,000 for married couples electing gift splitting. Gifts above that require filing Form 709 by April 15 of the following year, though the gift itself typically triggers no tax; it just reduces the remaining lifetime exemption. Florida has no state gift tax.
Documentary Stamp Tax on Real Property
Transfers of Florida real property can trigger the documentary stamp tax. The rate is $0.70 per $100 of consideration in every county except Miami-Dade, where the base rate is $0.60 per $100 with an additional $0.45 surtax on properties other than single-family homes.9Florida Department of Revenue. Documentary Stamp Tax
The key is consideration. When a personal representative distributes a house to a beneficiary who pays nothing for it, there’s typically no consideration and little or no tax. But if the property carries a mortgage the beneficiary assumes, the outstanding balance counts as consideration, and the tax applies to that amount. Inherited property with a loan on it is where this catches families off guard.
Fiduciary Income Tax
If the estate earns more than $600 in gross income during administration from rentals, interest, or dividends, the executor must file IRS Form 1041.10Internal Revenue Service. File an Estate Tax Income Tax Return This taxes income earned by estate assets, not the transfer of wealth. Florida has no state income tax, so there’s no matching state return.
The Decedent’s Final 1040
Someone has to file the decedent’s final Form 1040 for the year of death, covering income from January 1 through the date of death. Regular filing deadlines apply. A surviving spouse can file jointly for the year of death, and the IRS treats them as married for the full year as long as they didn’t remarry before year-end.11Internal Revenue Service. Filing a Final Federal Tax Return for Someone Who Has Died
Homestead Restrictions on Inheritance
Florida’s constitutional homestead protection shields the home from creditors and forced sale, and those protections carry to a surviving spouse or heirs.12FindLaw. Florida Constitution Art. X, Section 4 – Homestead; Exemptions The same rules also limit who can inherit it.
If the homeowner leaves a surviving spouse or a minor child, the homestead cannot be freely devised in a will. It can go to the spouse if there is no minor child, but beyond that the constitution controls.12FindLaw. Florida Constitution Art. X, Section 4 – Homestead; Exemptions A will provision that violates these limits is void as to the homestead, no matter what the homeowner intended.
When homestead passes without a valid devise, the surviving spouse gets either a life estate with the remainder to the decedent’s descendants, or can elect an undivided one-half interest as a tenant in common with the descendants.13Online Sunshine. Florida Statutes 732.401 – Descent of Homestead Neither option is usually what the homeowner planned. Assuming a will can override the constitutional homestead rules is one of the most common and costly estate mistakes in Florida.
Probate Costs: The Real Expense for Most Estates
Since no state tax applies and the federal exemption sits at $15 million, probate fees are what actually shrink the average Florida estate. Probate is the court-supervised process that validates the will, pays debts, and distributes assets. It generates two big professional fees.
Attorney Fees
Florida law sets a presumptively reasonable schedule for probate attorney fees based on the estate’s value:
- $40,000 or less: $1,500
- $40,001 to $70,000: $2,250
- $70,001 to $100,000: $3,000
- $100,001 to $1 million: $3,000 plus 3% of the value above $100,000
- $1 million to $3 million: additional 2.5%
- $3 million to $5 million: additional 2%
- $5 million to $10 million: additional 1.5%
- Above $10 million: additional 1%
These are fees for ordinary services only.14Online Sunshine. Florida Statutes 733.6171 – Compensation of Attorney for the Personal Representative Litigation, tax disputes, and complicated asset sales let attorneys petition for additional extraordinary fees on top of the schedule. On a $1 million estate, the ordinary attorney fee alone is $30,000.
Personal Representative Compensation
The personal representative (Florida’s term for executor) is entitled to separate compensation:
- First $1 million: 3%
- $1 million to $5 million: 2.5%
- $5 million to $10 million: 2%
- Above $10 million: 1.5%
On a $1 million estate, that’s another $30,000.15Online Sunshine. Florida Statutes 733.617 – Compensation of Personal Representative Combined with attorney fees, a $1 million estate can lose $60,000 to professional costs before a beneficiary receives anything. Family members who serve as personal representative sometimes waive this fee; many don’t realize they’re entitled to it.
Other Probate Expenses
Court filing fees, publication costs for creditor notices, appraisal fees, certified death certificates, and accounting fees all come out of the estate. These add thousands more. For larger or complex estates, the total is why so many Florida residents use revocable trusts, beneficiary designations, and joint ownership to keep assets out of probate.
Summary Administration
Florida offers a simplified probate track called summary administration for smaller estates. It’s available if non-exempt assets total less than $75,000, or if the decedent died more than two years ago regardless of estate size. Summary administration is faster and cheaper, and it avoids the full formal process. For modest estates, it eliminates much of the cost and delay of regular probate.