Financial Advantage of Living in Florida: No Estate or Inheritance Taxes
Estate taxes are paid by the decedent’s estate before the assets are distributed to heirs, so they are calculated on the overall value of the estate. Inheritance taxes are remitted by the heirs to an estate and calculated on the amount received by the heir.
Some states levy an estate or inheritance tax in addition to the federal estate tax. Twelve states and the District of Columbia impose estate taxes and six impose inheritance taxes. Maryland is currently the only state to levy both.
Hawaii and Washington State have the highest estate tax top rates in the nation at 20 percent. Eight states and the District of Columbia are next with a top rate of 16 percent. Massachusetts and Oregon have the lowest exemption levels at $1 million, and New York has the highest exemption level at $5.9 million.
Nebraska has the highest inheritance tax at 18 percent. Maryland has the lowest top rate at 10 percent. All six states with inheritance taxes exempt spouses, and some fully or partially exempt immediate relatives.
Florida has no estate or inheritance taxes. The state’s constitution also prohibits the imposition of a state estate tax, so that’s not likely to change anytime soon. Moving to Florida from a state like Hawaii or Washington State could save a family a considerable amount of money when a loved one dies.
Florida may be the closest thing in the U.S. to an offshore tax haven. The more assets, income & wealth a person has, the greater the benefit of living in Florida. In addition to the benefits of stunning beaches and a warm climate, Florida is a desirable and “less taxing” state to live in for the wealthy.