Florida Community Property Trust Act

This July marks the one-year anniversary of the passage of the Florida Community Property Trust Act, a new law that can be beneficial for many married couples. 

Under this law, married couples can create and move their assets into a community property trust. By doing this, when one spouse dies, 100% of the assets in the trust receive a step-up in tax basis equal to the date of death value of the assets as of the date of death of the first spouse to pass away. This allows the surviving spouse to save significantly on capital gains taxes when he/she sells off the appreciated assets in the trust. For example, let’s assume a trust holds assets that were purchased for $100,000 but have grown in value and at the date of the first spouse’s death are worth $250,000. The new basis for the assets is now $250,000. If the remaining spouse sells the assets at a later date for $300,000, he/she will only owe capital gains taxes on $50,000 ($300,000 sale price – $250,000 basis). 

Before this law came into effect, married couples in Florida who owned assets jointly or through tenancy by the entirety would only receive a basis step-up on 50% of the joint assets. 

In order to take advantage of this tremendous tax planning opportunity, the trust must meet statutory requirements.

For many couples, setting up a community property trust could offer significant tax benefits. Contact Huth, Pratt and Milhauser today to discuss the specifics of your situation and learn if a community property trust could be advantageous for you and to discuss any potential drawbacks.

Huth, Pratt and Milhauser

Huth, Pratt and Milhauser is a boutique law firm that offers a wide range of legal services in the specialty areas of wills, trusts, estates, probate, guardianship, and related matters. The range of legal services that Huth, Pratt & Milhauser provides in these specialty areas includes planning, administration and litigation. The experience and skills of our attorneys and staff, coupled with our knowledge of applicable law, enable us to provide outstanding representation to our clients.

Although we are located in South Florida, we proudly serve clients throughout the country and around the world from our Boca Raton offices. We strive to provide superior and focused counsel in a timely manner and at a competitive price. 

Huth, Pratt and Milhauser

2500 North Military Trail, Suite 460

Boca Raton, Florida   33431

Phone: 561-392-1800

hpmlawyers.com

2500 North Military Trail, Suite 460
Boca Raton, Florida   33431
Phone: 561-392-1800

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