As we move through 2025, major changes are on the horizon for federal estate and gift tax laws—and those changes are already shaping how individuals and families in Florida approach estate planning. While Florida does not impose its own state estate or inheritance tax, federal tax rules still play a major role in determining how much of your estate can be passed on without incurring tax liabilities.

If you haven’t reviewed your estate plan recently, now is the time to take a closer look. Here’s what you need to know.

What’s Changing?

Under current federal law, the estate and gift tax exemption are historically high. In 2024, the exemption was $13.61 million per individual and $27.22 million for married couples. However, this generous exemption is set to sunset on December 31, 2025, reverting back to pre-2018 levels.

Unless Congress takes further action, beginning in 2026, the exemption will likely drop to around $6 million per person, adjusted for inflation.

Why It Matters

This reduction could significantly impact families and business owners who have accumulated substantial wealth—including those who may not consider themselves “ultra-wealthy.” Assets such as real estate, retirement accounts, investment portfolios, and family businesses can quickly add up.

Failing to plan could result in a higher portion of your estate being subject to federal estate taxes, which can reach up to 40%.

Estate Planning Moves to Consider in 2025

To prepare for these upcoming changes, individuals and families should review and update their estate plans. Some strategies include:

  • Lifetime Gifting: Consider taking advantage of the current exemption by making large gifts before the 2026 deadline. This can reduce the size of your taxable estate.
  • Irrevocable Trusts: Transferring assets into certain types of trusts can remove them from your estate while retaining some control.
  • Spousal Lifetime Access Trusts (SLATs): These allow one spouse to benefit from trust income while the assets are removed from the estate.
  • Grantor Retained Annuity Trusts (GRATs): A tool for transferring appreciating assets to heirs at a reduced tax cost.

These options should be carefully reviewed with a qualified estate planning attorney and financial advisor.

Florida-Specific Considerations

Because Florida doesn’t impose a state-level estate or inheritance tax, it’s often considered a favorable jurisdiction for retirement and wealth preservation. Still, the federal rules apply no matter where you live, and Floridians are not exempt from the upcoming reduction in exemption thresholds.

Additionally, changes in family status (divorce, remarriage, or births), real estate holdings, and business ownership all warrant updates to your estate plan—especially in a changing tax landscape.

Final Thoughts

2025 is a critical year for estate planning. With major changes on the horizon, reviewing your plan now can help protect your assets and ensure that your legacy passes on according to your wishes. Proactive planning today can prevent expensive surprises tomorrow.