After working for most of your adult life in Tallahassee to accumulate assets and property, your ultimate hope is that your effort will be able to benefit your beneficiaries. To think about many of those assets being eaten up by taxes can be frustrating. Yet as is the case with most tax-related issues, you have likely accepted such an outcome as an unavoidable inevitability. Yet is it really?
The federal government does not want to see your hard-earned assets going towards taxes, either (Florida does not assess a state estate or inheritance tax). For this reason, a federal estate tax threshold has been established to determine which estates will be taxed. Per information shared by the Internal Revenue Service, that threshold amount is $11.58 million. As long as the total taxable value of your estate comes in below that amount, it will not be subject to tax.
Through careful planning, you may even be able to protect even more than that from taxes. The total value of your estate counts as an exemption. Your spouse is allowed to roll the unused portion of your exemption over to protect their own estate through estate tax portability. You can combine the benefit of the unlimited marital deduction (which allows you to leave your spouse an unlimited amount without it being taxed) with portability. This way, none of your estate tax exemption is used when you die, and your wife is allowed to combine your entire exemption amount with theirs to protect up to $23.16 million.
Estate tax portability is not automatic. Your spouse must file an estate tax return within nine months of your death electing portability in order to take advantage of it.