The federal estate tax exemption is at its highest level in history, but under current law it is scheduled to drop in 2026. Many families in Florida are asking what this means for their planning. The Law Offices of Jeffrey A. Herzog is here to explain these changes and what that could mean for you and your family.
The Current Estate Tax Exemption
For 2025, the federal estate tax exemption is set at $13.99 million per person. This means an individual can leave nearly $14 million to heirs without paying federal estate taxes. Married couples can combine exemptions, allowing close to $27.98 million to pass estate tax-free. In addition, the annual gift tax exclusion rises to $19,000 per recipient in 2025. This allows families to make meaningful gifts during life without eating into their lifetime exemption.
What Happens in 2026?
Originally, these higher exemption levels were due to “sunset” at the end of 2025, reverting to roughly half the current amount (around $7 million per person, adjusted for inflation). That would have created significant estate tax exposure for wealthier families.
Unless Congress acts, the higher exemption will expire at the end of 2025. Starting January 1, 2026, the federal exemption will be cut roughly in half, dropping to about $6.5–7 million per person, depending on inflation adjustments. This means some families who are currently under the threshold could face estate tax exposure beginning in 2026.
What This Means for Florida Families
Florida has no state estate or inheritance tax, so Floridians only need to focus on federal estate tax rules. The new exemption levels are generous enough that most Florida families will not owe any federal estate tax. Still, the changes create both opportunities and considerations for planning.
Key Opportunities
Greater Protection for Generational Wealth
Families with estates valued under $15 million per individual (or $30 million for couples) will avoid federal estate taxes entirely, preserving more wealth for children, grandchildren, or other beneficiaries.
Time to Gift Strategically
With high exemptions, you may choose to transfer assets now through gifts or trusts. This strategy allows future appreciation to occur outside your estate, reducing tax exposure down the road.
Clarity in Planning
Because the higher exemptions are temporary, families should review their estate plans now to take advantage of today’s favorable thresholds before they are reduced in 2026.
Considerations for Higher-Net-Worth Families
Rising Property Values
Florida real estate continues to appreciate, and families with multiple homes, investment properties, or vacation residences may see estate values creep past the exemption threshold.
Multi-State Property or Business Interests
While Florida does not impose its own estate tax, other states might. Owning property or operating a business in another state could expose part of your estate to additional taxes.
Complex Planning Needs
Families with estates approaching or exceeding the exemption may benefit from advanced tools such as irrevocable trusts, family limited partnerships, or charitable strategies.
Why Review Your Estate Plan Now
Even if your estate falls well below the federal exemption, a well-structured plan is still important. Wills, trusts, healthcare directives, and powers of attorney ensure that your wishes are carried out and that your family avoids unnecessary delays or disputes. For higher-value estates, reviewing your plan with the new exemption levels in mind helps lock in opportunities and minimize future risks.
At the Law Offices of Jeffrey A. Herzog, we work with Florida families to create estate plans that reflect both current laws and long-term goals. Whether your estate is modest or substantial, we can help you take full advantage of today’s favorable rules.
FAQ: Federal Estate Tax and Florida Families
Do Florida residents pay state estate or inheritance tax?
No. Florida does not impose an estate or inheritance tax. Only federal rules apply.
What is the federal estate tax exemption for 2025?
It is $13.99 million per person ($27.98 million for married couples).
What happens in 2026?
Unless Congress changes the law, the exemption will be cut about in half, dropping to roughly $6.5–7 million per person, adjusted for inflation.
Should I still create an estate plan if my estate is under the exemption amount?
Yes. Estate planning isn’t only about taxes. It ensures your wishes are followed, your assets are protected, and your family avoids unnecessary stress.
Planning Ahead With Confidence
The 2025 exemption changes offer Florida families an opportunity to plan confidently for the future. While most households will remain under the threshold, it is still wise to review your estate plan in light of these updates. By doing so, you can protect your assets, provide for your loved ones, and ensure peace of mind.
If you would like to update your estate plan or learn more about how these changes affect you, contact the Law Offices of Jeffrey A. Herzog today.