What to Know About Estate Taxes in NY, NC, and FL
Tax Strategies | by Jules Buxbaum | Friday, February 07, 2025
Estate taxes can have major implications for families and individuals with significant assets. If you split your time between different states or plan to move for a more favorable tax environment, it’s helpful to understand how New York, North Carolina, and Florida approach these taxes.
Whether you’re new to building an estate plan or refining a pre-existing strategy, state-level differences matter. For an additional look at legal guidelines, check out our estate planning laws in these states and see how each area outlines its requirements.
Overview of Estate Taxes
Estate taxes apply to the net value of a person’s assets when they pass away. If the estate meets or exceeds a certain threshold, a tax is imposed before any distribution to heirs.
On top of federal rules, some states add their own estate taxes. As of 2024, only 12 states and the District of Columbia impose an estate tax, each with its own exemption and rate (Tax Foundation, 2023).
Estate Taxes in New York
New York collects estate taxes for estates above a set exemption amount. In 2024, that threshold is $6.94 million, and it’s scheduled to rise to $7.16 million in 2025 (New York State Department of Taxation and Finance, 2023).
A unique twist is the “cliff.” If your estate exceeds the exemption by more than 5%, the entire value becomes taxable instead of just the overage. For instance, an estate worth $7.2 million in 2025 would owe state estate taxes on all $7.2 million, not just the small portion above $7.16 million.
New York also lacks spousal portability at the state level. This means each spouse’s exemption stands alone. If you’re married and want to maximize two exemptions, you may need more advanced planning, such as using specific trusts.
Estate Taxes in North Carolina
North Carolina repealed its estate tax in 2013 (SmartAsset, 2023). Today, no separate state estate tax applies.
However, estates in North Carolina may still be subject to federal estate tax if their net worth goes beyond the federal exemption levels. Proper understanding of your estate size and federal limits prevents unexpected costs for large estates.
Estate Taxes in Florida
Florida does not levy a state estate tax and is constitutionally barred from adding one (Tax Foundation, 2023). This arrangement contributes to Florida’s popularity among retirees seeking a lighter tax load.
Your estate in Florida could still face federal estate tax if it surpasses the federal exemption. Yet, the lack of state-level tax is a key reason high-net-worth individuals establish primary residency there.
Key Federal Considerations
The federal exemption for 2024 is $13.61 million per individual, increasing slightly to $13.99 million in 2025 (Morgan Lewis, 2024). Married couples can make use of “portability,” which allows any unused portion of one spouse’s exemption to transfer to the surviving spouse.
Unless legislation changes, these elevated federal exemptions are scheduled to sunset after 2025. At that point, the exemption could drop to around half its current figure, raising concerns for families with significant assets.
Comparing State-Specific Retirement Strategies
Different states’ approaches to estate taxes can ripple into other areas, such as retirement investments and property planning. A New Yorker might weigh a move if they’re close to the exemption threshold.
For more insight on how various rules intersect for retirees, visit our guide to state-specific tax benefits for retirees. This resource highlights how income taxes and other state laws fit together when building wealth for the years ahead.
Strategies to Minimize Estate Tax
Thoughtful planning can lower the amount your heirs pay. Many people use gifting strategies to reduce their taxable estates, taking advantage of the annual gift tax exclusion (currently $18,000 per recipient for 2024).
Others set up irrevocable trusts designed to remove assets from the estate. If you’d like more advanced ideas, look into how to legally pay zero estate taxes to see examples of charitable trusts, family limited partnerships, and more.
Risk and Retirement: 2Pi Financial’s Insight
At 2Pi Financial, we believe retirement portfolios often need a measured approach to risk. Low volatility seems safe, but for many individuals, long-term equity exposure offers the best chance to keep pace with living costs and future goals.
We also question traditional “glide path” strategies that reduce stock exposure strictly by age. Instead, we look at your future earning potential and total wealth. If you’re seeking a tailored plan, our 2Pi Financial Planner demonstrates how adjusting factors like risk tolerance and retirement age can shape wealth outcomes. It calculates probabilities of success while factoring in inflation, so you can make informed decisions.
Where to Go Next
When your estate value edges near federal or state thresholds, looking into advanced estate planning strategies pays off. Trusts, lifetime gifts, and well-timed transfers can reduce future tax bills by making use of current exemptions.
If you want more specifics on shaping your plan, our article on advanced estate planning strategies covers methods like marital deductions, QPRTs, and leveraging spousal exemptions.
Wrapping Up
Estate taxes can grow complicated, especially with state exemptions, federal rules, and looming changes in 2026. Knowing how New York’s cliff, North Carolina’s repeal, and Florida’s tax-free environment might affect your wealth is crucial for long-term success.
An organized strategy backed by the right guidance helps prevent surprises when assets transfer to your heirs. For more ways to shape and protect your legacy, explore our resource on estate planning strategies for long-term wealth.
References
1. Tax Foundation. (2023). “Estate and Inheritance Taxes by State.” Available at: https://taxfoundation.org/data/all/state/estate-inheritance-taxes/
2. New York State Department of Taxation and Finance. (2023). “Estate Tax.” Available at: https://www.tax.ny.gov/pit/estate/etidx.htm
3. SmartAsset. (2023). “New York Estate Tax.” Available at: https://smartasset.com/estate-planning/new-york-estate-tax
4. Morgan Lewis. (2024). “Estate Tax Exemption Announcements.” Available at: https://www.morganlewis.com/pubs
