If you’ve accumulated high-value assets, creating a thoughtful estate plan is one of the most important steps you can take to protect your wealth. In Florida, where many individuals hold significant investments in real estate, businesses, and financial portfolios, estate planning takes on an added level of importance.
Estate taxes can reduce the value of what you pass on to heirs. Without a strategy in place, a large portion of your estate may go to the federal government rather than your intended beneficiaries. At Drew Gaddis, Attorney at Law, in Doral, Florida, I understand the importance of minimizing estate taxes and working with individuals to protect their assets.
Estate Taxes and Thresholds
Before discussing how to reduce estate taxes, it's important to understand how they work. The federal estate tax applies to the transfer of assets upon death and is assessed on estates that exceed a certain threshold. For 2025, the federal estate tax exemption is projected to be around $13 million per individual or $26 million for married couples filing jointly.
Any value above that threshold may be taxed at rates up to 40%. This can lead to a significant loss of wealth if proper planning hasn’t taken place.
Though Florida doesn’t have a state-level estate or inheritance tax, residents may still be liable for federal taxes. That makes estate planning especially important for those with high-value holdings.
Start With an Accurate Asset Inventory
The first step in minimizing estate taxes is to know what you own. You’ll want to compile a detailed inventory of all your assets, including:
Real estate (primary residences, investment properties)
Business interests
Investment accounts
Retirement funds
Personal property (artwork, jewelry, vehicles)
Life insurance policies
Offshore or out-of-state assets
Understanding the true value of your estate helps identify where the tax liability lies. It also helps determine which assets may benefit most from specific planning strategies.
Use the Annual Gift Tax Exclusion Strategically
One effective method to reduce the size of your taxable estate is gifting. The IRS allows you to give up to $18,000 (as of 2025) per person each year without incurring gift tax or affecting your lifetime exemption. Married couples can combine their exclusions to gift up to $36,000 per recipient annually.
This strategy works well when done consistently over time. Gifting to children, grandchildren, or other beneficiaries gradually shifts wealth out of your estate. Over the years, this can add up to significant tax savings while providing financial support during your lifetime.
Consider these examples:
Gifting annual exclusions to multiple family members
Funding education or medical expenses directly (which are exempt from gift tax if paid directly to the provider)
Using a 529 college savings plan to transfer funds for educational purposes
These gifts reduce the overall size of your estate, lowering the taxable amount subject to estate taxes.
Establish an Irrevocable Trust
Trusts are a key component of estate planning, especially for those with high-value assets. An irrevocable trust moves assets out of your estate, which can help reduce estate taxes. Once placed in the trust, the assets are no longer under your control and aren’t considered part of your taxable estate.
Common types include:
Irrevocable Life Insurance Trusts (ILITs): Used to remove life insurance proceeds from your estate
Grantor Retained Annuity Trusts (GRATs): Allow you to transfer appreciating assets at a reduced gift tax value
Qualified Personal Residence Trusts (QPRTs): Transfer your primary or vacation home to beneficiaries at a discounted value
Each trust serves a specific purpose and can be tailored to your situation. By placing appreciating assets in a trust, you also reduce the risk of increasing estate value beyond the federal threshold.
Consider a Family Limited Partnership or LLC
If you own a family business or investment property, a Family Limited Partnership (FLP) or Limited Liability Company (LLC) may help reduce estate taxes. These entities allow you to retain control of assets while gradually transferring interest to family members.
The primary benefit lies in valuation discounts. Since minority interests in an FLP or LLC are harder to sell and have limited control, they’re often valued below their proportional share of the business. This reduced value means smaller taxable gifts and, ultimately, a lower estate value.
In Florida, forming an FLP or LLC can also offer asset protection benefits, shielding family assets from potential legal claims.
Use Portability to Maximize the Spousal Exemption
For married couples, the federal tax code allows for “portability,” which lets a surviving spouse use the unused portion of the deceased spouse’s estate tax exemption. This can help preserve up to $26 million in tax-free transfers for 2025.
To use portability, an estate tax return (Form 706) must be filed upon the first spouse’s death—even if no tax is due. It’s a simple way to protect more wealth and maintain flexibility for the surviving spouse.
This option is particularly helpful when the estate’s value is expected to grow or when one spouse holds significantly more assets than the other.
Make Use of Charitable Giving
Charitable giving can serve both philanthropic and tax-saving purposes. By donating to qualified charities, you can reduce the size of your estate and potentially eliminate some estate taxes.
Popular charitable strategies include:
Charitable Remainder Trusts (CRTs): Provide income during your lifetime, with remaining assets going to charity
Charitable Lead Trusts (CLTs): Provide income to a charity for a set time, after which assets go to your beneficiaries
Direct bequests: Leave funds or property to a charitable organization in your will
These tools are especially useful when you want to support causes you care about while limiting your estate’s tax exposure.
Review and Adjust Your Estate Plan Regularly
Your estate plan shouldn’t be static. Changes in tax law, family structure, or asset values can all affect how your plan functions. Regular reviews allow you to stay current and make adjustments as needed.
For instance, a business sale, property acquisition, or new grandchild might affect your gifting strategy or trust setup. Revisiting your plan every two to three years—or sooner if there’s a significant event—helps you stay prepared and retain control.
Your plan should reflect your current goals, asset mix, and the latest IRS exemption amounts. In a state like Florida, where asset protection and real estate play large roles, keeping everything up to date is especially important.
Work With Trusted Financial and Legal Advisors
While your estate plan should reflect your personal goals and values, putting it into action usually requires collaboration with financial and legal professionals. They can help structure documents correctly, calculate projected estate taxes, and keep your plan in compliance with both federal law and Florida regulations.
Their guidance is particularly valuable when handling high-value assets, such as business holdings, out-of-state property, or international investments. Working with professionals who understand estate planning strategies gives you clarity and helps align your plan with your long-term financial priorities.
Florida Homestead Laws and Their Role
For Florida residents, the state’s homestead laws add another layer to estate planning. Florida provides strong protection for a primary residence from creditors, and there are specific rules about how homestead property can be passed on.
Understanding these protections can affect how you title your property and how it fits into your overall estate plan. For instance, a homestead can’t be left in a trust that restricts ownership rights for a surviving spouse or minor child.
If you own high-value real estate in Florida, these laws are worth factoring into your estate planning strategy. They may not directly reduce estate taxes, but they can influence your plan’s structure and your family’s long-term stability.
Plan for Liquidity to Cover Estate Tax Obligations
If your estate includes a large portion of illiquid assets—such as real estate, business interests, or collectibles—it may be difficult for your heirs to cover the tax bill without selling something valuable.
Planning for liquidity means anticipating the cash needed to pay potential estate taxes. You might consider:
Purchasing life insurance with an ILIT
Maintaining liquid investment accounts
Setting aside reserve funds in trust structures
This helps avoid forced sales and allows your beneficiaries to keep assets intact. It also provides more control over how and when property is transferred.
Contact Us Today
Structuring your estate plan to reduce estate taxes requires thoughtful planning and an understanding of your assets, goals, and available tools. For individuals with high-value estates throughout South Florida, careful steps today can prevent significant tax losses tomorrow. Reach out to me, an experienced estate planning and tax law attorney today, to get the help you need.
