OPT FOR ALTERNATE VALUATION TO SAVE ON FLORIDA ESTATE TAXES

Florida residents can use an alternate estate valuation method in order to save on estate tax. The alternate valuation method helps in situations where the value of a decedent’s estate has decreased significantly due to market conditions.

The gross value of a decedent’s estate is the fair market value of all his or her property on the date of his or her death. However, if the gross estate value of the deceased decreases significantly over the six months following the decedent’s death, then the alternate valuation method may allow a reduction in the tax amount owed due to a drop in estate value.

Alternate valuation method is not applicable to those properties already distributed, sold or otherwise disposed of within six months after death of the decedent. Those properties are valued at the time of sale or disposition. A personal representative of the deceased, trustee of the property or the heir of the deceased to whom the property would pass under the laws of succession is responsible for disposition of such property.

If alternate valuation is elected, then all property that forms part of the decedent’s gross assets as at the time of his or her death is subject to alternate valuation, which cannot be selectively applied to certain properties. Advance payment of interest or dividends declared after the death will also be part of property that is part of the valuation. Property accrued after death of the decedent and during the alternate valuation period is labeled as excluded property.

Use of the alternative valuation option must be indicated on the estate tax return. The option cannot be used if the estate tax return has already been filed or after one year from the date on which the return was supposed to be filed. Careful consideration with legal representatives is required because once the alternative valuation option is exercised it cannot be reversed.

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Written by Luis E. Barreto

Luis E. Barreto

Luis is a probate and guardianship litigator with over 23 years of experience in the field. Determination of heirs, will contests, breaches of fiduciary duty, removal of personal representatives, guardians and trustees are just some of the types of litigation he addresses. In addition, he administers non-contested estates and guardianships.