Estate Tax Planning in Florida
Gift Taxes & Generation Skipping Transfer Tax Exemptions
Gift TaxThe unified credit concept ties the gift tax and the estate tax together. As mentioned, the lifetime gift and estate tax basic exclusion amount for 2018 is $11,180,000. Taxpayers use a unified estate and gift tax credit to offset the transfer taxes that would otherwise be paid on the transfer of assets, up to the exclusion amount of $11,180,000. If a taxpayer uses his or her transfer tax credit by making lifetime gifts, the federal estate tax exemption at death is reduced by the amount of the unified credit that was used during life. Note that annual exclusion gifts do not reduce the unified credit. The annual gift exclusion is currently $15,000. Married couples can combine their annual gift exclusion amounts to make tax-exempt gifts totaling $30,000 to as many individuals as they choose each year, without reducing their available unified credit.
Generation-Skipping TransfersThe generation-skipping transfer tax (GST) is levied in addition to gift or estate taxes on transfers made to a “skip person.”
A “skip person” is a person deemed to be two or more generations below the generation of the person making the gift to them. A trust will be considered a distribution to a skip person if no distributions from that trust can be made to “non-skip” persons.For 2018, the generation-skipping tax exemption mirrors the federal estate tax exemption amount and tax rate ($11,180,000 million and 40%, respectively).
Florida Estate TaxesFlorida’s estate tax system is commonly referred to as a “pick up” tax because Florida picks up all or a portion of the credit for state death taxes allowed on the federal estate tax return (IRS Form 706 or 706NA). Since there is no longer a federal credit for state estate taxes on the federal estate tax return, there is no longer basis for the Florida estate tax. Florida has neither an estate tax (a tax paid by the estate) nor an inheritance tax (a tax paid by a recipient of a gift from an estate). To stay informed about legislative developments and how they may affect your estate planning strategies, be sure to visit this website often, subscribe to our monthly e-newsletter, and follow my blog. If you are concerned about the tax liabilities created under your current estate plan, please call our office to schedule a consultation immediately.
South Florida Estate Planning Attorney Brian C. Perlin, assists clients with Estate Planning, Elder Law, Probate Court, Probate & Estate Administration, Long-Term Care, Medicaid Planning, Veterans Benefits, Charitable Planning, Special Needs Planning, Estate Tax Planning, Business Succession and Asset Protection, in the cities of Miami, Coral Gables, and Kendal, Florida, and the surrounding areas.
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