Estate Tax Planning in Miami

Miami estate tax planning in 2026 is mostly a federal exercise, and that is the first thing to get straight, because Florida has no state estate tax and no state inheritance tax at all. Florida repealed its estate tax years ago, so a Miami family does not owe Tallahassee a dime when someone dies. What you are planning around is the federal estate tax, which kicks in only on very large estates, plus the practical machinery of moving assets to your heirs cleanly. So Miami estate tax planning splits into two questions. Will the federal estate tax touch you, and if not, how do you still pass assets efficiently with minimal probate friction and the best income tax outcome for your heirs.

On the federal side, the number that matters is the basic exclusion amount. For 2026 the federal estate and gift tax exemption sits at roughly $15,000,000 per person after the recent law locked in a higher permanent figure rather than letting it fall back to the old level. A married couple can shield around $30,000,000 combined with proper planning. The IRS keeps the current figures on its what is new in estate and gift tax page, and the executor reports a taxable estate on Form 706. Above the exemption, the federal rate climbs to 40 percent, so the planning stakes for a truly large Miami estate are real.

Here is the mechanics for a smaller estate, which is most people. If your total estate sits well under $15,000,000, you will owe no federal estate tax, and with no Florida estate tax either, the tax planning shifts to income tax basis and probate avoidance. The single most valuable feature for your heirs is the step up in basis under Internal Revenue Code section 1014. Assets you hold at death get their cost basis reset to fair market value on your date of death, which wipes out the unrealized capital gain. That is often worth more to a Miami family than any estate tax maneuver.

Worked example. You bought a Brickell condo in 1995 for $200,000 and it is worth $1,200,000 at your death. If you had sold it during life, you would face capital gain on roughly $1,000,000. Instead it passes to your daughter at a stepped up basis of $1,200,000. She can sell it the next week for $1,200,000 and owe zero capital gain. That is a six figure income tax saving that has nothing to do with the estate tax, and it is the core of Miami estate tax planning for ordinary wealth. Compare that to gifting the condo to her during your life, where she would take your old $200,000 basis and face capital gain on $1,000,000 the day she sells. Same property, very different tax bill, and the difference is simply timing.

We see this every year. A Miami client gifts highly appreciated stock or real estate to their kids during life, thinking they are getting ahead of the estate tax, and instead they hand the kids a carryover basis and a giant future capital gain, throwing away the step up they would have gotten by simply holding the asset until death. For most families that is exactly backward. The edge case is the large estate where the 40 percent estate tax actually bites. There, lifetime gifting of appreciating assets out of the estate can beat the step up, because removing future growth from a 40 percent estate can outweigh the lost basis adjustment. That trade off is the heart of advanced planning, and the right answer depends on your total estate size, how fast the asset is growing, and how long you expect to hold it. A $50,000,000 estate full of fast appreciating assets plans very differently from a $4,000,000 estate of mature holdings. To work through which side of that line you fall on, our tax strategy consulting team runs the numbers, and our entity formation and structuring group sets up the trusts and entities that carry the plan. Begin at our new client inquiry page.

No, Florida has no estate tax and no inheritance tax, and that single fact reshapes Miami estate tax planning compared to high tax states. A resident of New York, Massachusetts, or Oregon faces a state estate tax with a much lower exemption than the federal one, sometimes biting at $1,000,000 or $2,000,000. A Miami resident faces none of that. Florida’s constitution actually prohibits a state inheritance or estate tax. So the only estate tax a Florida family plans around is the federal one, and the federal exemption is enormous at roughly $15,000,000 per person in 2026. A Miami estate under that figure owes no death tax to anyone, state or federal, which is a position most Northeast families would envy.

This is why so many people establish Florida residency for estate planning, not just for the lack of an income tax. If you split time between a northern state and Miami, nailing down genuine Florida domicile can remove an entire layer of state death tax that would otherwise hit your estate. The federal rules on what counts as your taxable estate still apply, and the executor still files Form 706 if the estate exceeds the threshold, but you escape the state level tax that makes Miami estate tax planning so much simpler than planning in the Northeast.

The mechanics of domicile matter and people underestimate them. Florida wants to see that Miami is truly your home, not a tax dodge. That means a Florida driver license, Florida voter registration, a declaration of domicile filed with the county, spending more than half the year here, moving your primary doctors and bank accounts, and claiming the Florida homestead exemption on your Miami home. A former high tax state can and does audit departing residents aggressively, arguing you never really left, which would drag your estate back under their death tax.

Worked example. A couple keeps a $4,000,000 home in New Jersey and a $2,000,000 condo in Miami. New Jersey repealed its estate tax but still has an inheritance tax in some cases, and other northern states would tax a large estate at the state level. If they sloppily keep New Jersey as their domicile, their full worldwide estate could face that state’s death tax. If they properly establish Miami domicile, with the homestead, the license, the voter card, and more than 183 days here, only the federal estate tax can reach them, and below $15,000,000 per person that is zero. The state level saving on a large estate can run into the hundreds of thousands.

We see this every year. A snowbird assumes that owning a Miami condo and spending winters here makes them a Florida resident, but they kept their northern driver license, voted up north, and spent only four months in Florida. When they die, the old state claims them as a resident and taxes the estate. Domicile is about proof, not intent, so document everything. The edge case is real property left in the other state. Even a confirmed Florida resident can owe estate tax to a northern state on real estate physically located there, because states tax in state real property regardless of where the owner lived. Holding that out of state property through an entity can sometimes convert it to intangible personal property that escapes the other state’s reach, so that the value is taxed where the owner lived rather than where the bricks sit. This planning has to be set up well before death to hold up, not patched together by the executor afterward. That is exactly the kind of structuring our entity formation and structuring team handles. Our tax strategy consulting group maps the domicile plan. Start at the new client inquiry page.

Lifetime gifting is one of the main tools in Miami estate tax planning, and the rules give you more room than most people realize, but the numbers get tangled because there are two separate exclusions that people mix up. The first is the annual gift tax exclusion. The second is the lifetime exemption that the estate and gift tax share. Understanding how they interact is what makes a gifting plan work instead of accidentally eating into your estate shelter.

The annual exclusion lets you give a set amount to each person every year with no gift tax and no filing at all. For 2026 that annual exclusion is $19,000 per recipient. A married couple can combine to give $38,000 to each person per year through gift splitting. Give to ten grandchildren and that is $380,000 a year moving out of your taxable estate, every year, completely free of any gift tax and without touching your big lifetime exemption. Run that for a decade and you have shifted nearly $4,000,000 out of the estate using only the annual exclusion, all without a single dollar of gift tax. The IRS explains the filing rules for larger gifts in the instructions for Form 709, the gift tax return.

The lifetime exemption is the much larger number, the same roughly $15,000,000 per person that shelters your estate at death. It is unified, meaning gifts during life and the estate at death draw from one shared pool. When you give someone more than the annual exclusion in a year, you file Form 709 and the excess reduces your remaining lifetime exemption. You usually owe no tax then, you just use up shelter that would have protected your estate later. The IRS posts the current unified figures on its estate and gift tax updates page.

Worked example. In 2026 you give your son $119,000 to help with a Miami home down payment. The first $19,000 is covered by the annual exclusion. The remaining $100,000 is a taxable gift, which means you file Form 709, but you owe no gift tax because you are nowhere near using up your roughly $15,000,000 lifetime exemption. Instead your lifetime exemption drops from about $15,000,000 to about $14,900,000. No cash leaves your pocket for tax, you simply used $100,000 of your shelter early, dropping your remaining exemption to about $14,900,000. For most Miami families nowhere near the exemption, that is a free move that shrinks the future estate.

We see this every year. Someone writes a $50,000 check to a grandchild and never files Form 709 because they heard gifts are not taxable, not understanding the filing duty kicks in above the annual exclusion even when no tax is due. The missing return can create problems later when the estate is settled and the IRS reconstructs lifetime gifts. File the 709 when you cross the annual exclusion, every time. The edge case is paying tuition or medical bills directly. If you pay a school or a hospital directly for someone, that payment is unlimited and does not count as a gift at all under Internal Revenue Code section 2503(e), so a Miami grandparent can pay a grandchild’s full college tuition and their orthodontist bill on top of the annual exclusion gifts, stacking the two strategies in the same year. The key is paying the institution directly. Reimbursing the parent for tuition they already paid does not qualify and would count as an ordinary gift. To build a multi year gifting plan that uses these tools without wasting exemption, our tax strategy consulting team designs the schedule, and our individual tax return group files the 709s correctly. Reach us at the new client inquiry page.

The step up in basis is the most valuable and most overlooked feature in Miami estate tax planning, and for families below the federal exemption it usually matters far more than the estate tax itself. The rule is simple to state. When you die, the assets in your estate get their tax basis reset to fair market value on your date of death under Internal Revenue Code section 1014. All the appreciation that built up during your life vanishes for income tax purposes. Your heirs inherit the asset as if they paid today’s value for it. There is also a less happy version, the step down, where an asset that lost value resets to a lower basis at death, so holding a deeply depreciated asset until death can waste a loss your heirs would have wanted.

This is why aggressive lifetime gifting can backfire for a Miami family that is not exposed to the estate tax. Gifting an appreciated asset gives the recipient your old basis, a carryover, so the built in gain rides along and gets taxed when they sell. Holding that same asset until death gives your heirs a stepped up basis and erases the gain. Since Florida has no estate tax and the federal exemption is around $15,000,000 per person, most Miami families should be protecting the step up, not gifting appreciated assets away.

The mechanics interact with the estate tax exemption in a way worth understanding. Assets included in your taxable estate are the ones that get the step up. That is the trade off at the high end. Pull an appreciating asset out of your estate through gifting and you may save 40 percent estate tax on its future growth, but you lose the step up and your heirs keep your low basis. Leave it in and you keep the step up but expose the value to estate tax if you are over the exemption. Below the exemption there is no trade off at all. You simply want the step up. The IRS describes the estate computation in the instructions for Form 706.

Worked example. You own a stock portfolio you bought for $300,000 that is now worth $1,500,000, and your total estate is $5,000,000, well under the exemption. If you gift the stock to your kids now, they take your $300,000 basis, and selling it triggers tax on $1,200,000 of gain, roughly $240,000 of federal capital gain tax at the 20 percent rate plus the 3.8 percent net investment income tax. If instead you hold it until death, they inherit a $1,500,000 basis, sell, and owe nothing. Same asset, same family, and patience saves over a quarter million dollars. That is Miami estate tax planning at its most concrete.

We see this every year. Adult children inherit a long held Miami property and assume they owe capital gain on decades of appreciation when they sell, so they hesitate or overpay an estimate. In reality the date of death step up means they often owe little or nothing if they sell soon after inheriting. Get the date of death valuation done properly, because that appraisal sets the basis. The edge case is community property, which Florida is not, and assets held jointly. A surviving spouse in Florida generally gets a step up only on the half of jointly held property that belonged to the deceased spouse, not the survivor’s half, so titling matters, and how you and your spouse hold the deed to your Miami home can change the basis result by hundreds of thousands of dollars. Reviewing title now, while both spouses are living, is far easier than untangling it later. Our tax strategy consulting team models the gift versus hold decision, and our investment coordination group helps position the portfolio. Begin at the new client inquiry page.

An estate has to file Form 706, the federal estate tax return, when the gross estate plus certain lifetime gifts exceeds the filing threshold, which tracks the basic exclusion amount of roughly $15,000,000 per person in 2026. Below that, most estates file nothing federally, and with no Florida estate tax there is no state return either. So a large share of Miami estate tax planning is about confirming you are under the threshold and then making sure the estate passes smoothly, rather than about preparing a 706 at all.

There is one big reason a smaller estate might still file a 706 voluntarily, and it is the portability election. When the first spouse dies, the survivor can elect to carry over the deceased spouse’s unused exemption, called the deceased spousal unused exclusion. To capture it, the estate must file Form 706 even if no tax is due, and it must do so to make the election timely. Skip that filing and you can forfeit millions of dollars of exemption that the surviving spouse could have used later. The IRS covers the filing rules in the instructions for Form 706 and answers common questions on its estate tax frequently asked questions page.

The deadline matters. Form 706 is generally due nine months after the date of death, with a six month extension available on Form 4768. For a portability only filing where no tax is owed, the IRS has provided a longer simplified window for many estates, but you do not want to rely on relief procedures when a timely election is a simple matter. The mechanics of valuing the estate, listing assets, and claiming the marital and charitable deductions all run through the 706, and errors in valuation are where audits start. The IRS scrutinizes hard to value assets the most, things like closely held business interests, fractional real estate, and art, so a defensible appraisal from a qualified appraiser is money well spent on any sizable Miami estate.

Worked example. A husband dies in 2026 with a $6,000,000 estate, all of which passes to his wife under the unlimited marital deduction, so no estate tax is due. His estate uses none of his roughly $15,000,000 exemption. If the executor files a timely Form 706 electing portability, the widow adds his unused exemption to her own, giving her around $30,000,000 of combined shelter. If the executor skips the 706 because no tax was due, that extra exemption can be lost, and if the widow’s estate later grows above her single exemption, the family could face a 40 percent tax that a simple filing would have prevented.

We see this every year. The surviving spouse and the family decide not to bother with a 706 because the lawyer said no tax was owed, and nobody mentions portability. Years later the survivor’s estate has grown and there is no carried over exemption to soften it. File the portability 706 at the first death whenever there is any chance the survivor’s estate could approach the exemption, even if it seems unlikely today, because values grow and exemptions can change. The edge case is a non citizen surviving spouse, where the unlimited marital deduction does not apply automatically and a qualified domestic trust may be needed to defer the tax, a real issue in international Miami families given how many residents here hold green cards or foreign passports. The qualified domestic trust holds the assets and defers the estate tax until the non citizen spouse takes principal or dies, preserving the deferral the marital deduction would normally give automatically. Our tax compliance team prepares the 706 and the portability election, and our tax strategy consulting group decides whether to file. Reach us through the new client inquiry page.