Florida Has No Estate or Inheritance Tax: What That Actually Changes When You Move

The Question Behind the Move

Deborah and Martin Feldman spent most of their working lives on Long Island. At 71 and 69, they made the decision many families in similar circumstances make: they sold their primary home, bought a house in Jupiter, and became Florida residents. Their estate sits near the federal exemption threshold. Their son, David, still lives and works in New York. The question they brought to their planning conversations was simple on its surface: how much does this move actually save at death, and does David still owe New York anything?

This article answers that question directly. The Feldmans are a composite example and not clients, but their situation mirrors what a significant number of families from the Northeast work through after relocating to Volusia County, Palm Coast, Ormond Beach, and the Palm Beaches.

Florida's Position: No Estate Tax, No Inheritance Tax, Full Stop

Florida imposes no state estate tax and no inheritance tax. That is not a legislative preference that can be reversed with a simple majority vote. The Florida Constitution caps any state estate or inheritance tax at the credit the federal government allows against the federal estate tax, and that federal credit ended for deaths occurring after 2004. Only a constitutional amendment approved by sixty percent of Florida voters could change that cap. For practical purposes, no Florida decedent owes state-level estate or inheritance tax, and no Florida heir owes any state tax on what they receive, regardless of the amount.

Florida repealed its so-called pick-up or sponge tax effective January 1, 2005, when the federal credit disappeared. There is nothing left to pick up. This is one of the clearest and most durable tax advantages Florida offers to residents with larger estates.

The Federal Estate Tax: Still Real, Still Relevant for Some

The federal estate tax did not disappear. Under the One Big Beautiful Bill Act signed on July 4, 2025, the federal exemption was set at fifteen million dollars per person, or thirty million dollars for a married couple, beginning January 1, 2026. The exemption is indexed for inflation and carries no sunset provision. The top federal rate remains forty percent on amounts above the exemption.

For most families who relocate to Florida, including the majority of retirees settling in communities from DeLand to New Smyrna Beach, the federal estate tax will never apply. Fewer than one percent of estates nationally reach the federal threshold. The Feldmans, with an estate near that threshold, are the exception rather than the rule, which is exactly why their situation is worth examining in detail.

What New York Was Doing to the Feldmans

New York is one of a small number of states that still impose a separate state-level estate tax with a meaningfully lower exclusion amount. New York's exclusion in 2025 was approximately 7.16 million dollars per person, well below the federal threshold. New York offers no portability between spouses, so a surviving spouse cannot simply absorb an unused exemption from the deceased spouse the way federal law allows.

The feature of New York's estate tax that catches families most off guard is commonly called the cliff. Under federal estate tax rules, only the amount above the exemption is taxed. New York does not work that way. If a New York estate exceeds one hundred and five percent of the state exclusion amount, the entire estate becomes subject to New York's estate tax, not just the portion above the threshold. A modest increase in estate value can therefore trigger a disproportionate jump in the tax owed. The top New York rate reaches sixteen percent, and even moderate estates caught above the cliff face graduated rates beginning at just over three percent on the first five hundred thousand dollars of taxable value.

For the Feldmans, still living on Long Island, that cliff was a genuine planning concern. Their estate, approaching the federal exemption, sat comfortably above the New York cliff. Had Martin died while domiciled in New York, his estate would have faced a New York estate tax bill calculated against the entire estate, not merely the excess above the exclusion. Moving to Florida did not just save them some tax. It removed an entire category of tax exposure.

Domicile at Death Is What Actually Counts

A state can only impose its estate tax on a decedent who was domiciled there at death, with one important exception discussed below. Domicile is a legal conclusion drawn from intent and the actions that demonstrate it. Maintaining a vacation home in the Hamptons, keeping a country club membership in Westchester, or spending stretches of time in New York does not automatically make someone a New York domiciliary as long as Florida domicile has been properly established and documented.

Establishing Florida domicile requires genuine intent to make Florida your permanent home, combined with affirmative acts that show it. Executing and recording a Declaration of Domicile with the county clerk under Florida Statutes section 222.17 is one of the clearest signals. Applying for the homestead exemption with the county property appraiser, which must be filed by March 1 of the tax year you want it to take effect, is another. Getting a Florida driver license within thirty days of establishing residency, registering vehicles within ten days, and updating voter registration with the county supervisor of elections all reinforce the picture. None of this is complicated, but it must actually happen. States like New York audit domicile claims aggressively, particularly for high-net-worth individuals.

The Feldmans did all of this when they moved to Jupiter. Their Declaration of Domicile was recorded. They applied for homestead exemption. They updated every registration and license. When the time comes, the factual record will support a Florida domicile conclusion at death.

The Problem the Move Did Not Solve: Property Still in New York

Real property is the exception to the domicile rule. A state has the authority to tax real property located within its borders regardless of where the owner was domiciled. This rule has two consequences for families like the Feldmans.

First, if they had retained the Long Island house after the move, that property would remain subject to New York estate tax as part of the New York taxable estate, calculated under New York's rules, potentially including the cliff. The value of the property is allocated to New York for state estate tax purposes even though the Feldmans are now Florida domiciliaries.

Second, real property in a state other than Florida requires a separate probate proceeding in that state, called ancillary probate. Ancillary probate in New York adds cost, time, and administrative complexity to settling an estate. A properly structured revocable trust can hold title to out-of-state property and avoid ancillary probate, though it does not necessarily eliminate the estate tax exposure in the state where the property sits.

David, the Feldmans' son who lives in New York, faces no New York inheritance tax simply because he is a New York resident inheriting from his parents. New York does not impose an inheritance tax on heirs. His parents' domicile at death is what matters for New York's estate tax, not where David lives.

The Revised Plan

Understanding these rules, the Feldmans made several decisions worth noting. They sold the Long Island home before establishing Florida domicile, so no New York real property remained in their estate after the move. That single step removed the ancillary probate risk and the New York in-state property allocation from the equation entirely.

Their existing wills, trust, and powers of attorney were drafted in New York. Florida generally recognizes out-of-state estate planning documents that were valid where signed, but a Florida review is the sensible step after any move. The structure that worked for a New York married couple with a smaller state exemption and no portability may not be optimally designed for a Florida domiciliary now working with a much larger federal exemption and no state tax at all.

Their Florida plan was restructured to reflect the current federal exemption, the absence of any state estate tax concern, and David's situation as a New York resident who will owe nothing to New York simply by virtue of receiving an inheritance.

What This Meant for the Feldmans

Before the move, the Feldmans faced potential exposure to New York's estate tax at rates beginning above three percent and running to sixteen percent, calculated against an estate that sat above New York's cliff. That exposure ran into the hundreds of thousands of dollars at the estate size they described, all of it attributable to a state they were leaving.

After establishing Florida domicile with a clean factual record, selling the Long Island property, and updating their estate plan for Florida law, their state-level estate tax exposure dropped to zero. Their federal exposure depends on where their estate lands relative to the current exemption, but that is a federal question they would have faced in any state. Florida simply added nothing to it.

Families considering a move from high-tax northern states to communities along Florida's east coast, whether in Ormond Beach, Port Orange, Palm Coast, or elsewhere in the region, frequently underestimate how much of the planning work happens before the moving truck arrives. The legal steps that establish domicile, the decisions about retained northern property, and the review of existing estate documents are all part of the same conversation.

Talk to Someone Who Understands Both Sides of the Move

Arthur Simpson, Esq., CIPS, is an Attorney and REALTOR® with Realty Pros Assured in Ormond Beach. He works with buyers and families relocating to Florida's east coast and brings both legal context and real estate experience to the transition. If you are making a move like the one the Feldmans made, visit arthursimpson.com to learn more or to get in touch directly.