When you buy property in Miami, you think about location, price, financing and rental income. Almost nobody thinks about what happens to that property on the day they are no longer here. Yet how you buy today decides how much your heirs will pay in taxes and how long it will take them to receive it. For a foreign buyer, that difference can be hundreds of thousands of dollars.
I am not an attorney or an accountant, and this article does not replace their advice. I write it because, as a Realtor who works with families from Latin America and Europe, I keep seeing the same mistakes, almost always from missing information at the moment of purchase. Here I explain the basic concepts, the most important tax effects and, above all, the questions to bring to your attorney before you sign.
Planning for inheritance at the time of purchase protects your investment and saves your family time, paperwork and taxes.
Why Inheritance Is Different for Foreign Owners
The United States charges a federal estate tax on a person's wealth at death. The big difference is who you are for tax purposes:
- U.S. citizens and U.S. domiciliaries have a 2026 exemption of $15 million per person. The vast majority of families never pay this tax.
- Nonresident aliens have an exemption of only $60,000 on their U.S.-situated assets, a figure that has not changed since the 1980s and is not adjusted for inflation.
Above that exemption, the tax can reach 40%. In other words, a $600,000 condo in Brickell held in the name of a nonresident foreign owner with no planning could generate a very large federal tax bill for the heirs, who would also have to deal with it before they can sell or transfer the property.
The good news: Florida has no state estate tax or inheritance tax. The issue is federal, and in most cases it can be planned for at purchase with the right structure.
Resident or Nonresident: The IRS Sees It Differently
For estate tax, what counts is your domicile: where you live with the intention to stay. This is a different concept from residency for income tax. A person can spend a lot of time in Miami, even file taxes here, and still be treated as a nonresident for estate tax if they never left their domicile in their home country. The opposite can also happen.
That is why the first question for your attorney is not "which structure should I use?" but "how does the IRS see me?" Everything else depends on that answer.
Which Assets Are Exposed
For a nonresident alien, the tax applies to assets considered "U.S.-situs." The most common are:
- U.S. real estate: houses, condos and land.
- Shares of U.S. companies, even if held in an account opened in another country.
- Tangible personal property located in the U.S., such as furniture, art or vehicles.
Some assets, such as certain bank deposits or life insurance proceeds, are treated differently. The rules have nuances, so your attorney or accountant should review your whole situation, not only the property.
Tax Treaties Can Help (or Not)
The United States has estate tax treaties with a small group of countries, mostly in Europe. These treaties can increase the exemption, avoid double taxation and give benefits between spouses. For most buyers from Latin America there is no such treaty, so planning depends on how the purchase is structured.
Ask your attorney whether your country has a treaty with the United States and how it applies to you.
The Probate Process in Florida
Beyond the tax, there is the paperwork. When a person dies owning property in their own name in Florida, a court process called probate is usually needed to transfer it to the heirs. If the person lived in another country, an ancillary probate is opened in Florida in addition to the estate process in their home country.
What you should know:
- It takes time and money. Attorneys, courts, translations and apostilles are involved. While the process runs, the property keeps generating costs (HOA or condo fees, taxes, insurance).
- Not just anyone can serve as personal representative. Florida limits who can administer an estate if they do not live in the state. Certain close relatives are generally allowed, but not every trusted person.
- Your foreign will may not work as it is. Florida recognizes many wills signed in other countries, but there are exceptions. For example, handwritten wills without witnesses (holographic wills), common in some countries, are generally not accepted in Florida.
- Your home country's laws matter too. Some countries have forced heirship rules that require leaving a share to certain heirs. Your Florida planning should be coordinated with your country's.
The Most Common Structures (and What Each One Solves)
There is no perfect structure for everyone. Each one solves one problem and may create another. These are the ones you will hear about most, explained simply.
1. Your Personal Name
This is the simplest for buying and financing, but for a nonresident alien it is the option with the most exposure to estate tax and the one most likely to require probate in Florida.
2. Joint Ownership With Right of Survivorship
When two people buy together with right of survivorship (joint tenancy with right of survivorship, or tenancy by the entirety between spouses), the property passes automatically to the survivor without probate. But note that for nonresident aliens the IRS may include the full value of the property in the estate of the first to die unless contributions can be shown. It avoids the process, but not necessarily the tax.
3. Enhanced Life Estate Deed (Lady Bird Deed)
Florida allows a special deed with which you keep full control of the property during your life and, at death, it passes directly to the beneficiaries you choose, without probate. It is simple and inexpensive, but it does not eliminate federal estate tax for a nonresident.
4. Revocable Living Trust
A revocable trust lets the property pass to your beneficiaries without probate and with more privacy. For a nonresident alien, by itself it normally does not avoid estate tax, because the law still treats the property as yours.
5. Florida LLC
Many foreign buyers use an LLC to purchase. It offers privacy, some liability protection and easier administration, especially if the property is rented. But its effect on estate tax is not automatic: it depends on how it is structured and how the IRS treats it. A single-member LLC with a foreign owner also has annual reporting obligations to the IRS. Do not assume that "putting the property in an LLC" solves inheritance.
6. Foreign Entity or Combined Structures
Some attorneys recommend that the property be held by a company formed outside the United States, or combinations of a foreign company, an LLC and a trust, because shares of a foreign company are generally not treated as U.S.-situs assets. It can be very efficient for estate tax, but it has costs and tax effects when you sell, when you rent and in your country of residence. It is a decision to make with specialized advice in both countries.
7. Life Insurance
Instead of avoiding the tax, some families cover it: they buy a life insurance policy whose payout lets the heirs pay the tax without having to sell the property. It is a complementary tool worth discussing.
| Structure | Avoids probate? | Reduces estate tax (nonresident)? | Keep in mind |
|---|---|---|---|
| Personal name | No | No | The most exposed option |
| Joint with survivorship | Yes, at first death | Not necessarily | IRS may include the full value |
| Lady Bird deed | Yes | No | Simple and inexpensive |
| Revocable trust | Yes | Generally no | Privacy and continuity |
| Florida LLC | Depends | Depends on structure | Annual IRS reporting |
| Foreign entity / combined | Yes, in most cases | May reduce it | Costs and effects on sale and rental |
General, simplified table. The actual result depends on your domicile, your country, your structure and current law.
Tax Effects Your Heirs Inherit
The Property's Value Is "Stepped Up" at Inheritance
In general, when someone inherits U.S. property, their tax basis adjusts to the market value on the date of death (step-up in basis). If your parents bought at $300,000 and it is worth $700,000 at inheritance, heirs who sell close to that value may pay very little tax on the gain. Certain structures can cause this benefit to be lost, so ask about it.
FIRPTA When Heirs Sell
If the heirs are foreign persons and sell the property, FIRPTA withholding generally applies: the buyer must withhold a percentage of the sale price and send it to the IRS. That withholding is not the final tax; if the actual gain is low, the difference can be recovered or a reduced withholding can be requested from the IRS. I explain it in my guide to selling a Miami condo.
Heirs Will Need an ITIN
To file returns, sell or rent the property, foreign heirs will normally need an Individual Taxpayer Identification Number (ITIN). The process takes several weeks, so it helps to know in advance.
Property Tax
When ownership changes, the county may reassess the property at market value, and some benefits (such as the homestead exemption) do not pass automatically to heirs. It is a cost worth calculating.
Giving the Property Away During Your Life Is Not Always the Answer
Some people think about gifting the property to their children before they die. For a nonresident alien, gifting U.S. real estate can trigger gift tax, and the children may lose the step-up in basis they would get by inheriting. In 2026 the annual gift exclusion is $19,000 per person and the special exclusion for gifts to a non-citizen spouse is about $194,000. Before gifting, get advice.
The Questions to Bring to Your Attorney
This is the most practical part of the article. Print it or save it for your next meeting.
- How does the IRS classify me?Am I a resident or nonresident for estate tax, and what would happen if my immigration status changes?
- Does my country have a treaty with the United States?Does it give me any additional benefit?
- In whose name should I buy?Individual, couple, LLC, trust or foreign company, and why that option in my case.
- How much would my heirs pay under each structure?Ask for an example with real numbers.
- How does that structure affect financing?Some loans are only made to individuals and others do accept an LLC.
- What happens when I rent or sell?Income tax, FIRPTA and annual reporting.
- Do I need a Florida will?Is my home-country will valid here? How are the two coordinated?
- Who will be able to administer my estate?Do my children or spouse meet Florida's requirements?
- What do my country's inheritance laws say?Is there forced heirship or taxes there that I must consider?
- Does it make sense to buy life insurance to cover the tax?
- What annual costs does the structure have?Registration, accounting, filings and upkeep.
- How often should I review the plan?Changes in law, family, residence or assets.
My recommendation: have this consultation before you sign the purchase contract, not after closing. Changing the structure once the property is already in your name can bring extra costs, taxes and paperwork.
Practical Tips to Be Prepared
- Build your team from the start: an estate planning attorney with experience in foreign owners, an accountant who knows both countries, and a Realtor who coordinates the purchase timeline.
- Keep your documents organized: deed, LLC or trust documents, will, insurance policies and the contact details of your attorney and accountant.
- Talk to your family: they should know what you own, where the documents are and who to call.
- Name beneficiaries on U.S. bank and investment accounts when possible.
- Keep the structure current: an LLC that is not renewed or a trust that is poorly administered can lose its benefits.
- Review the plan every time you buy another property, change countries or your family changes.
If you are just starting, I also recommend my guides on buying a home in Miami as a foreign national (in Spanish), getting a mortgage as a foreign national (in Spanish) and the Spanish version of this article. If your goal is to invest, visit my page for Miami investors.
Frequently Asked Questions
Does Florida charge an inheritance tax?
No. Florida has no state estate tax or inheritance tax. The tax foreign owners worry about is the U.S. federal estate tax.
What is the estate tax exemption for a nonresident alien?
It is $60,000 on U.S.-situated assets, unless a tax treaty provides a larger benefit. Above that amount the tax can reach 40%. For U.S. citizens and domiciliaries, the 2026 exemption is $15 million per person.
Does buying through an LLC avoid estate tax?
Not automatically. The effect depends on how the LLC is structured and who owns it. Some structures with foreign companies can reduce it, but they have other costs. It should be decided by a specialized attorney.
Is my home-country will valid in Florida?
Often yes, but not always. For example, handwritten wills without witnesses are generally not accepted in Florida. Many foreign buyers sign an additional will or use a trust for their U.S. assets.
What happens if I die without planning anything?
Your heirs will probably have to open a probate case in Florida, pay any federal tax that applies and meet your country's requirements. All of that takes time and money, and the property keeps generating costs in the meantime.
This article is for general information only and is not legal, tax or financial advice. The 2026 figures (the $15 million exemption, the $19,000 annual exclusion and the roughly $194,000 non-citizen spouse exclusion) come from adjustments announced by the IRS and may change. Discuss your case with an estate planning attorney and an accountant with international experience.
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