The Federal Tax Cliff and Florida's Quirky Rules Are Putting Orlando Residents' Estate Plans at Risk
Two forces are colliding in Central Florida right now. A major federal tax cliff is approaching at the end of 2025. And Orlando continues absorbing hundreds of thousands of new residents every year…
Two forces are colliding in Central Florida right now. A major federal tax cliff is approaching at the end of 2025. And Orlando continues absorbing hundreds of thousands of new residents every year — many of them carrying wills, powers of attorney, and trust documents drafted under the laws of states that work very differently from Florida.
The result is a local legal environment where a surprising number of people are either entirely unprotected or operating under a false sense of security. Retirees from the Midwest. Young families from the Northeast. Puerto Rican professionals settling in Kissimmee and Osceola County. Theme park workers with minor children and no guardian designation on paper. Their paperwork looks official. It may not hold.
The Two Pressures Meeting in Central Florida Right Now
Florida has attracted more than 300,000 net new residents annually in recent years, and the Orlando metro consistently ranks among the fastest-growing large markets in the country. That growth draws people who built financial lives elsewhere, accumulated property elsewhere, and had their legal documents prepared under the rules of somewhere else — which is to say, under rules that don’t apply here.
The Tax Cuts and Jobs Act of 2017 created a temporary doubling of the federal estate and gift tax exemption. That provision sunsets on December 31, 2025. When it does, the per-person exemption — currently around $13.61 million for 2024 — is projected to fall to roughly $7 million, adjusted for inflation. The math changes meaningfully for high-net-worth households in communities like Windermere, Dr. Phillips, and Winter Park. Couples who were comfortably under the combined exemption threshold may find themselves in taxable territory without having done anything at all.
Neither of these pressures requires someone to be wealthy to matter. The transplant with a holographic will that Florida won’t recognize has a problem. So does the retired teacher with a $1.2 million home and a beneficiary designation she set in 1998. It’s a different kind of problem — and in some ways, the less obvious one is more dangerous.
Florida Is Not Like Other States, and the Differences Are Not Minor
Transplants most often get tripped up here. The gap between Florida estate planning rules and those of other states can be inconvenient. It can also be outright invalidating.
Holographic wills don’t exist in Florida. A holographic will is handwritten and signed by the testator, with no witnesses. Roughly half of U.S. states recognize them. Florida is not among them. Under Florida law, a will must be signed in the presence of two witnesses, who then sign in the presence of each other and the testator. A document that would have been a perfectly valid will in Virginia or Texas becomes legally void the moment the person who wrote it establishes Florida domicile. You don’t have to miss this rule by much to be completely unprotected.
Homestead law operates as its own system. Florida’s constitutional homestead protections are among the strongest in the country, and they impose real restrictions on what you can do with your primary residence in your estate plan. If you have a spouse or a minor child, you cannot devise your homestead property freely. The surviving spouse has rights to the property that exist regardless of what your will says. People who moved here with a carefully constructed plan to leave the family home to children from a prior relationship sometimes discover that Florida prohibited it — quietly, in the fine print of a law they never knew applied to them.
The surviving spouse’s elective share under Florida Statute §732.2065 is 30 percent of the decedent’s “elective estate.” That figure can include assets the decedent thought were already distributed outside the estate through beneficiary designations and joint ownership. The calculation is broader than most people expect, and it can disrupt carefully arranged plans if nobody accounted for it in the drafting.
Die without a valid will in Florida, and the state’s succession rules under Chapter 732 determine who gets what. Unmarried partners receive nothing. Blended family situations produce results that can feel genuinely counterintuitive. The process still goes through probate regardless of the estate’s size.
What Probate in Orange County Actually Looks Like
The Ninth Judicial Circuit Court handles probate matters for Orange and Osceola counties, at 425 N. Orange Avenue in Downtown Orlando. The practical consequences are concrete: assets can be frozen during the proceeding, a family home can sit in limbo, business interests can be disrupted. Even a modest estate — a home, a retirement account, a car — can generate real friction and cost if the person didn’t structure their affairs to avoid probate.
Most modern estate plans aim to ensure that assets pass to the right people, quickly and privately, without going through that courthouse at all. This isn’t about complexity for its own sake. It’s because the alternative is far more expensive and disruptive. A drawn-out probate proceeding means public court filings, delays on asset access, and legal fees that accumulate as the case moves through the system. The family doesn’t just lose money. They lose time, often during a period when they have nothing left to spare.
The Lady Bird Deed, Explained
The enhanced life estate deed — commonly called the Lady Bird deed — is legal in only a handful of states. Florida is one of them, and it’s widely used here. A homeowner transfers their property to a named beneficiary but retains the right to live in it, sell it, mortgage it, or change the beneficiary during their lifetime, without needing the beneficiary’s consent. When the owner dies, the property passes directly to the beneficiary outside of probate. No court involvement. No delay.
For retirees who own a home free and clear and want to pass it to their children without the expense of probate, this is often the cleanest available tool. There’s also a meaningful Medicaid planning benefit. Because the original owner retains the right to reclaim full ownership, the property generally isn’t considered a completed gift — which means it doesn’t trigger a Medicaid disqualification period the way an outright transfer would. For retirees settled in Windermere and the surrounding area, attorneys such as Pathway Law P.A. — which practices in the area and handles these instruments regularly — can prepare a Lady Bird deed in a way that accounts for Florida’s specific requirements.
One important caveat: it cannot be executed through an online will service, and it requires an attorney who knows the specific mechanics under Florida law.
The 2025 Exemption Sunset and What It Means Here
The federal estate tax exemption is currently $13.61 million per individual. That figure was created by the Tax Cuts and Jobs Act, and it expires after December 31, 2025. Barring Congressional action — possible, but not something to count on — the exemption reverts to its pre-TCJA level, adjusted for inflation. Projections place it around $7 million per person. Florida itself has no separate estate tax. The relevant tax is federal.
For households in Winter Park and the higher-end pockets of Dr. Phillips and Maitland, the math after the sunset is worth running carefully. A couple who jointly owns a home worth $2.5 million, retirement accounts totaling $3 million, a business interest, and other assets can move from clearly under the exemption to clearly over it without any change in their actual wealth. That’s a disorienting thing to realize.
Irrevocable trust structures are among the planning tools available before the deadline, but these strategies require meaningful lead time. Trusts of this complexity aren’t drafted in a week, and the attorneys doing this work correctly are already booking well into 2025. If this applies to your situation, the window is tighter than it probably feels right now.
The Orlando Residents Estate Planners Are Still Missing
Three local populations remain statistically underprepared, for reasons specific to who they are and what resources they’ve had access to.
The Latino community, particularly Puerto Rican residents, represents the second-largest Puerto Rican population outside the island itself within the Orlando metro. Residents who grew up there and moved to Central Florida may not have any familiarity with Florida’s will-and-trust framework. That’s not a criticism — it’s an honest description of how these systems work, and how poorly they’re communicated across cultural and linguistic lines. Language access matters. A practitioner who understands that context produces better outcomes than one who doesn’t. Find someone who has worked extensively with this community if you’re part of it.
Hospitality and theme park workers form the core of Orlando’s economy. The workforce skews younger, often has minor children, and earns hourly wages that feel inconsistent with the phrase “estate planning.” But the most urgent document for a 34-year-old with two kids and no plan isn’t a trust. It’s a guardian designation for those children if both parents die. That designation lives in a will. Without it, a judge decides — on whatever information they have, on a timeline that serves the court’s calendar, not the family’s needs. The cost of an attorney to prepare that document is substantially less than the cost of the guardianship proceeding that follows when there’s no plan at all.
Lake Nona Medical City professionals — physicians, researchers, administrators, technology workers — are accumulating 401(k) balances, equity compensation, and deferred income, and most of them haven’t touched their beneficiary designations since the account was opened. Under SECURE Act 2.0 rules governing inherited IRAs, those outdated designations can create unnecessary tax exposure for heirs. A beneficiary designation that predates the 2022 rule changes may be doing something its owner would not choose today — quietly, automatically, without anyone noticing until it’s too late to fix. This is one area where our legal & finance coverage consistently surfaces problems that residents didn’t know they had.
What Online Will Services Actually Can and Cannot Do in Florida
LegalZoom and similar platforms have their legitimate uses. For a single adult with no real property, no minor children, no blended family situation, and a simple desire to leave a documented expression of intent, a template will properly signed with two witnesses can be technically valid under Florida law.
Problems arise as soon as the situation gets one degree more complicated. Most people’s situations are at least one degree more complicated.
Online services can’t advise on whether your property qualifies as homestead, which determines whether you can freely devise it. They can’t coordinate your will with your beneficiary designations on life insurance and retirement accounts, which pass outside the will entirely. They can’t account for inherited IRA distribution rules under SECURE Act 2.0. They can’t draft a Lady Bird deed. They can’t help a blended family think through the interaction between a surviving spouse’s elective share rights and children from a prior relationship. They can’t tell you that the durable power of attorney you brought from Ohio may need to be re-executed in Florida to work with Florida financial institutions. They won’t flag the fact that your homestead exemption on your property tax bill might mean you’ve inadvertently disqualified yourself from a planning strategy you were counting on.
The value of an attorney isn’t the paper. It’s the questions asked before the paper is drafted. If you’re uncertain whether your existing accountant is flagging these intersections, our guide to choosing the best accountant for your Orlando small business covers what to look for in financial professionals who coordinate with your legal team.
What the Process Looks Like, Practically
A typical engagement with a Central Florida estate planning attorney starts with an intake meeting covering family structure, assets, existing documents, and goals. The attorney asks about marital history, because prior marriages create elective share complications. They ask about how property is titled — tenancy by the entireties, joint tenancy, individual ownership — because Florida treats each differently. They ask about gifts you’ve made, business interests, whether you anticipate Medicaid planning as you age, whether you’ve changed your mind about decisions embedded in old documents from other states.
For most clients, the core package includes a will, a durable power of attorney under Chapter 709 of the Florida Statutes, and a healthcare surrogate designation and living will under Chapter 765. Depending on the situation, a revocable living trust allows assets to pass outside probate and provides a management structure if the client becomes incapacitated. More complex situations add Lady Bird deeds, beneficiary designation reviews, and irrevocable trust structures for tax or Medicaid planning.
On cost: anyone who quotes you a number before understanding your circumstances isn’t doing you a favor. The right conversation is directly with the attorney at intake. An attorney consultation is generally far less expensive than the probate proceeding it prevents. Florida allows flat-fee arrangements for straightforward estate planning, so you know the cost before you commit — which is more than most legal engagements can say.
What to Do Before You Hire Anyone
Before engaging any estate planning attorney in Florida, go to floridabar.org and verify that the attorney is in good standing with an active license. The Florida Bar’s attorney lookup is public and takes about ninety seconds.
When you meet with an attorney, bring specific questions. Does my property qualify as homestead under Florida law, and what does that mean for how I can devise it? If I moved from another state, are my existing documents valid in Florida, or do they need to be re-executed? Have my beneficiary designations on retirement accounts and life insurance been reviewed since SECURE Act 2.0? Those three questions will tell you quickly whether the attorney is actually thinking about your situation or just filling in a template.
The out-of-state will sitting in your file drawer may already be a problem. And the federal exemption sunset isn’t waiting for anyone to get around to it.
