Florida Elder Law: Year-End Tax Moves for 2025

As we approach the close of 2025, Florida residents—especially seniors and those planning for long term care—have a unique window of opportunity to make strategic tax moves. Because federal tax exemptions, gift limits, and legislative changes may shift in 2026, now is the time to act in a measured, intentional way. This guide explores elder law–friendly, year-end tax strategies for Floridians, with an eye toward protecting assets, preserving care eligibility, and reducing burdens on your heirs.

Why the End of 2025 Is Especially Important

• The current federal gift and estate tax exemptions are historically high—but they’re expected to shrink after 2025 unless Congress acts.

• Florida has no state estate or inheritance tax, giving you more flexibility on the state side—but federal rules still matter.

• New 2025 tax rules (such as adjustments to deductions and trust rules) amplify the benefit of acting now.

• For those needing long term care or Medicaid planning, executing moves prematurely or improperly can backfire—so planning must be precise.

Key Year-End Moves to Consider

Below are elder law–oriented tax strategies to weigh before December 31, 2025.

1. Use the Maximum Annual Gift Exclusion

In 2025, the annual gift tax exclusion is $19,000 per recipient. Married couples can “split” gifts and give up to $38,000 to one person without gift tax consequences. Gifting now helps reduce your taxable estate before exemptions potentially shrink.

This is particularly helpful for seniors wanting to transfer wealth or help with large expenses (education, medical costs) for children or grandchildren.

2. Make Lifetime Gifts (Strategic Larger Transfers)

Because the federal lifetime gift/estate tax exemption is likely to decrease post-2025, it may make sense to accelerate larger gifts in 2025. By moving assets out of your estate now, you reduce what’s subject to future taxation.

Tools such as irrevocable trusts, grantor trusts, or family limited partnerships can further help shield these assets if structured properly.

3. Leverage Trust Planning & Trust Conversions

With expanded exemptions and relaxed rules, 2025 is a prime time to:

• Review existing trusts for potential conversion or optimization

• Create new irrevocable trusts to remove appreciating assets from your estate

• Establish nongrantor trusts to shift income tax liability to beneficiaries in lower brackets

• Use special purpose trusts (e.g. for long term care or Medicaid planning) that balance asset protection with flexibility

4. Roth Conversions & Income Shifting

Because future tax law changes are uncertain, converting traditional IRAs or other tax-deferred accounts into Roth accounts (where taxes are paid now in exchange for tax-free growth) can be smart—especially if you anticipate rates rising.

Likewise, shifting investment income to trusts or family members in lower brackets can help minimize overall tax liability.

5. Charitable Giving & Bunching Deductions

Charitable contributions are still one of the most tax-effective tools, especially for nonitemizers. Consider:

• Qualified Charitable Distributions (QCDs): If you’re age 70½ or older, donating directly from an IRA can reduce your taxable income.

• Bunching contributions: Combine multiple years of charitable giving into one year to exceed standard deduction thresholds and maximize deduction benefit.

6. Double-Check Trusts, Life Insurance & Beneficiary Designations

• Confirm that life insurance policies and annuities are held in Irrevocable Life Insurance Trusts (ILITs) if possible, keeping proceeds out of your taxable estate.

• Ensure beneficiary designations (for retirement accounts, IRAs, 401(k)s) are up to date and aligned with your estate plan.

• Review trust provisions to ensure they aren’t inadvertently including assets back into your estate or disqualifying certain protections.

7. Revisit Medicaid / Long-Term Care Plans Carefully

For those planning for Medicaid or long term care, it’s crucial that transfers or gifts don’t run afoul of the Medicaid “look-back” period. Some aggressive moves made too close to need may be penalized.

Work with an elder law attorney to structure planning strategies that reduce estate tax exposure without jeopardizing your eligibility for care programs.

Potential Pitfalls to Watch

• Over-gifting near the end of the year without proper structure may trigger gift tax returns or misalign with trust rules

• Poorly drafted trust documents that don’t conform to the newest tax laws

• Converting to Roth or shifting income in a year when one’s income is unusually high (unexpected tax bracket consequences)

• Making transfers too close to applying for Medicaid or assistance programs, leading to penalties

• Failing to retitle assets or fund trusts after creating them—an unfunded trust is ineffective

What Changed in 2025 That Affects These Moves

• The “Big Beautiful Bill” (OBBBA) codified and stabilized many federal tax provisions—such as making certain exemptions permanent and adjusting trust taxation rules.

• The standard deduction was increased: For example, married couples filing jointly now enjoy a larger floor, making traditional itemized deductions less impactful—raising the importance of timing charitable deductions.

• Trust and nongrantor trust strategies have become more valuable because of favorable shifts in trust tax law and deduction ceilings.

• Gift and estate exemptions are expected to sunset or shrink in 2026, making 2025 a critical year to act.

How Absolute Law Group Can Help You Maximize 2025

At Absolute Law Group, we specialize in elder law and tax-aware estate planning for Florida clients. We can help you:

• Map out a personalized year-end tax strategy that aligns with your goals and care needs

• Draft trusts, gift transfers, or Roth conversion strategies properly

• Coordinate gifting and Medicaid planning to avoid penalties

• Review your existing plan to ensure alignment with 2025 rules

• Provide clients with actionable checklists, worksheets, and reminders so nothing slips through the cracks

Don’t leave 2025’s opportunities on the table. With the right moves made before year-end, you can lock in stronger tax position, protect your legacy, and give your loved ones a smoother path forward. Let’s talk soon about your best next steps.