Florida has no state estate tax, and as of 2026, the federal exemption is permanently set at $15 million per individual under the One Big Beautiful Bill Act. Speak with Allie Castellano to align your plan with today’s rules and protect your assets.
If you read estate-tax-planning content on most Florida law-firm websites, you’ll find warnings about a 2026 federal exemption cliff and “use-it-or-lose-it” gifting strategies tied to the TCJA sunset. That content is obsolete. The One Big Beautiful Bill Act (Pub. L. 119-21), signed July 4, 2025, eliminated the sunset and made the federal estate-tax exemption permanent at $15 million per individual ($30 million per married couple) effective January 1, 2026. The cliff no longer exists.
The shift is significant. With the exemption locked at $15M, fewer than 0.1% of Florida estates are projected to owe federal estate tax. For most Sarasota families, the planning conversation has moved on, from estate-tax minimization, which was the dominant motivator for two decades, to a broader set of objectives that always mattered but were often overshadowed by tax planning.
Florida Has No State Estate Tax. But Federal Estate Tax Still Matters
Florida hasn’t collected a state-level estate tax since 2004. Florida Statutes Chapter 198 (Estate Tax) was tied to the federal “credit for state death taxes” that Congress phased out under EGTRRA, and Florida has not enacted a replacement. There is also no Florida inheritance tax (a separate concept where the recipient rather than the estate pays).
Federal tax rules may still matter, including:
- Federal estate tax under 26 U.S.C. § 2010, for estates above the exemption.
- Federal gift tax under 26 U.S.C. § 2501, when lifetime gifts exceed the annual exclusion.
- Generation-skipping transfer tax, for certain transfers to grandchildren or more remote beneficiaries.
For a Sarasota family below the $15 million federal exemption, the estate tax may not drive the plan. But that does not eliminate the need to review gifts, trusts, basis, portability, GST issues, and asset titling.
The 2025 OBBBA Permanence. What Changed
The One Big Beautiful Bill Act made several estate and gift tax rules permanent.
Key changes and continuing rules include:
- Federal exemption: $15 million per person for deaths after December 31, 2025.
- Married couples: up to $30 million with proper planning.
- Annual gift exclusion: $19,000 in 2026, unchanged from 2025.
- Top federal estate, gift, and GST tax rate: 40%.
- Portability: still available for surviving spouses.
- Step-up in basis at death: still preserved.
- Inflation indexing: resumes for 2027 using 2025 as the new base year.
The exemption did not revert to about $7 million in 2026, so the old rush to make large, sunset-driven gifts has changed.
The IRS confirmed the 2026 adjustments in Rev. Proc. 2025-32.
Tools like GRATs, ILITs, charitable trusts, dynasty trusts, and FLPs still matter, but they should be used for real planning goals, not an outdated exemption deadline.
What Estate Tax Planning Looks Like Now
For most Sarasota families, the higher federal exemption shifts the focus from shrinking the estate to preserving value. Basis planning now matters more. Assets kept in the estate may receive a date-of-death step-up in basis, while lifetime gifts of appreciated property may lose that benefit.
Portability still matters too. A surviving spouse can preserve the deceased spouse’s unused exemption, or DSUE, by filing Form 706 on time, even if no estate tax is due.
For family businesses, valuation discounts may still be useful for succession and gift-tax planning. Charitable trusts and qualified charitable distributions remain useful when they match the client’s giving goals.
Trusts still have a role, but the reason should be clear: probate avoidance, beneficiary protection, special-needs planning, insurance planning, or long-term family wealth transfer.
Florida residency also matters for snowbirds. A Declaration of Domicile under Fla. Stat. § 222.17 can help, but it should be part of a broader shift in legal and tax ties.
Beyond Tax. The Larger Estate-Plan Goals
For most Sarasota families, post-OBBBA estate planning is now mostly non-tax work:
- Probate avoidance still matters. A revocable trust must be funded. Beneficiary designations must be current. Lady Bird deeds may need to be reviewed for Florida real estate.
- Asset protection. Florida homestead, tenancy by the entireties, retirement-account exemptions, MAPT for long-term care
- Medicaid planning, long-term care coordination with the 60-month look-back
- Family governance, blended-family planning, succession of family businesses, and multi-generational coordination
- Digital assets under Florida’s Fiduciary Access to Digital Assets Act (Ch. 740)
- Inheritance distribution mechanics, spousal protections, pretermitted heirs, and homestead descent rules
These goals always mattered, but pre-OBBBA, the tax-minimization conversation often crowded them out for higher-net-worth clients. Under OBBBA permanence, these goals take their proper place.
Coordinated Planning for Sarasota Family Businesses
Sarasota’s economy is heavily concentrated in closely held and family-owned businesses. Under OBBBA permanence, succession planning for these businesses pivots from primarily tax-minimization toward governance and continuity:
- Buy-sell agreements funded with key-person life insurance are a central component.
- S-corporation trust qualification (QSST/ESBT) and technical compliance under IRC §1361 remain the same regardless of OBBBA.
- Valuation discounts are useful primarily for basis planning and gift-tax efficiency.
- IRC §6166 installment payment of estate tax, relevant only for businesses above the exemption.
- Family LLC structures, creditor-protection, and governance benefits remain even when the tax case weakens.
For Sarasota family-business owners, the OBBBA shift makes non-tax succession governance the larger share of the work. The cross-practice combination of Alisha Buckman’s business law practice with Allie Castellano’s estate planning practice is structured for that work.
How Allie Castellano Helps
Allie Castellano leads the firm’s estate planning and probate practice and works with Sarasota families on estate-tax planning under the post-OBBBA framework:
- Estate-tax exposure analysis under the permanent $15M exemption
- Basis-planning strategies that preserve step-up where appropriate
- Portability and DSUE election preparation
- Trust structures that remain useful (RLT, ILIT, charitable trusts, dynasty trusts)
- Coordinated asset protection and Medicaid planning under the post-tax-focus framework
- Family-business succession coordination with Alisha Buckman
- Florida domicile establishment for snowbirds severing northern-state ties
The first consultation is free.
Frequently Asked Questions
With the federal estate tax exemption at $15 million, do I still need a trust in Florida?
Often, yes. The trust may not be for estate tax. It may be for probate avoidance, incapacity planning, privacy, beneficiary protection, special-needs planning, or family control.
What is portability, and does it still matter?
Portability lets a surviving spouse use the unused federal exemption of the first spouse to die. Filing Form 706 can preserve that extra exemption, even when no estate tax is owed at the first death.
Does Florida have an estate tax?
No. Florida does not have a current state estate tax or inheritance tax. Its former estate tax ended after the federal state death tax credit was phased out.
How does OBBBA affect Sarasota family businesses?
Fewer family businesses will face federal estate tax under the permanent $15 million exemption. Planning now often focuses more on buy-sell agreements, key-person protection, basis planning, ownership control, and business continuity.
If you have a meaningful estate, a closely-held business, or are a Sarasota snowbird considering Florida domicile, Buckman, Buckman & Castellano, P.A. can help. Allie Castellano serves clients across Sarasota, Venice, Bradenton, North Port, and surrounding communities. To schedule a free consultation, please contact our office.
