Many families in Miami breathe a sigh of relief when they learn that Florida has no state estate tax. But there’s one catch: the federal estate tax still applies to large estates.
For families with substantial assets—luxury homes in Miami Beach, international investments, or valuable businesses—federal estate tax can significantly impact what heirs inherit. An experienced Miami probate lawyer plays a critical role in minimizing this burden and ensuring full compliance with IRS requirements.
🔹 Understanding the Federal Estate Tax
The federal estate tax is a tax on the transfer of assets after someone passes away.
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Exemption Amount: For 2023, each individual has a federal estate tax exemption of $12.92 million (adjusted annually for inflation).
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Married Couples: With proper planning, couples can potentially double this exemption through portability, allowing them to transfer nearly $26 million tax-free.
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Tax Rate: Estates exceeding the exemption are taxed at up to 40%.
📌 Example: If a Miami resident leaves an estate worth $20 million, $7.08 million could be subject to federal estate tax—resulting in a tax bill of nearly $2.8 million.
🔹 Why Federal Estate Taxes Matter in Miami
Miami is home to many high-net-worth families, entrepreneurs, and international investors. These estates often:
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Exceed the federal estate tax exemption threshold.
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Include luxury real estate that appreciates rapidly.
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Hold businesses, stocks, and international assets that complicate tax reporting.
Without proper planning, heirs may face millions in federal estate taxes.
🔹 How a Probate Lawyer Helps with Federal Estate Taxes
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Estate Tax Filings
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Prepares and files IRS Form 706 (United States Estate Tax Return).
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Ensures compliance with all federal deadlines to avoid penalties.
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Portability Elections for Married Couples
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Helps surviving spouses elect portability to transfer unused exemption amounts.
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Prevents unnecessary taxes on larger estates.
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Valuation & Appraisals
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Coordinates professional appraisals for Miami real estate, businesses, and investments.
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Ensures valuations are accurate, reducing the risk of overpaying taxes.
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Maximizing Deductions
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Deducts funeral expenses, debts, charitable contributions, and estate administration costs.
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Helps structure asset transfers to reduce taxable estate value.
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Advising Beneficiaries
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Explains how federal estate taxes interact with income tax and capital gains tax when assets are sold or transferred.
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🔹 Common Challenges in Federal Estate Tax Probate Cases
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High-Value Miami Real Estate → Condos and luxury properties can push estates over the exemption threshold.
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International Estates → Non-U.S. citizens have a much lower federal exemption (just $60,000).
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Business Valuations → Disputes often arise over how to value family-owned businesses.
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Missed Deadlines → IRS estate tax returns are generally due 9 months after death; missing deadlines may result in penalties.
📌 Local Insight: Miami & Federal Estate Tax
Many Miami estates involve cross-border ownership (Cuban, Venezuelan, Canadian, or European assets). These estates often face stricter IRS rules, making it critical to have a lawyer who understands both Florida probate and international tax compliance.
FAQs: Federal Estate Taxes in Florida Probate
Q: Does Florida have its own estate tax?
👉 No. Florida eliminated its estate tax in 2005. Only federal estate tax may apply.
Q: Who pays the federal estate tax?
👉 The estate itself pays, before assets are distributed to heirs.
Q: How can we reduce estate taxes?
👉 With proper planning—such as creating trusts, making lifetime gifts, and using the spousal portability exemption.
Conclusion
While Florida doesn’t have a state estate tax, federal estate taxes can significantly impact high-value Miami estates. The rules are complex, especially for families with luxury real estate, large investments, or international ties.
A Miami probate lawyer helps by ensuring IRS compliance, maximizing exemptions, and protecting your family’s financial future.
📞 If your family is facing probate with potential federal estate tax issues, contact our Miami probate lawyers today. We’ll help you navigate the process and preserve your loved one’s legacy.
