Estate Taxes in Texas
Worry about estate taxes is one of the most common reasons people hesitate to start planning, yet for the large majority of Texas families, estate tax is not a concern at all. Understanding how these taxes actually work can replace anxiety with clarity and help you focus on the planning that genuinely matters for your family. Ellen Williamson Law explains below how estate taxes apply to Texas residents at both the state and federal level.
Does Texas Have an Estate Tax?
Texas does not have a state estate tax, and it does not have a state inheritance tax. A Texas resident’s estate is not taxed by the state simply because property passes at death, and beneficiaries who inherit from a Texas estate do not owe a Texas inheritance tax on what they receive.
This is a meaningful advantage compared with states that impose their own estate or inheritance taxes, sometimes with much lower thresholds than the federal system. For most families in Texas, the only transfer tax to consider is the federal estate tax.
The Federal Estate Tax
The federal estate tax applies only to estates that exceed a high exemption amount. According to the Internal Revenue Service, the basic exclusion amount for individuals who pass away in 2026 is $15 million per person. Estates valued below that threshold generally owe no federal estate tax, and only the portion of an estate above the exemption is taxed, at a top federal rate of 40 percent.
Because the exemption is so high, the overwhelming majority of Texas families will never owe federal estate tax. For them, estate planning is not about tax avoidance at all. It is about making sure property passes to the right people, smoothly and without unnecessary court involvement.
What Counts Toward the Federal Estate
If estate tax could be a concern, it helps to know what the IRS counts. The federal “gross estate” generally includes much more than people expect. It can include real estate, bank and investment accounts, retirement accounts, business interests, and the death benefit of life insurance policies you own. Certain deductions then apply, including amounts passing to a surviving spouse or to qualified charities.
This is one reason charitable giving can play a role in planning for larger estates, and why coordinating your beneficiary designations with your overall plan matters.
The Gift Tax and Annual Exclusion
The federal gift tax is closely tied to the estate tax. Large gifts made during life can reduce the exemption available at death. However, federal law allows an annual gift tax exclusion, which for 2026 is $19,000 per recipient. Gifts within that yearly amount generally do not reduce your lifetime exemption or require a gift tax return.
For families who want to pass wealth to the next generation gradually, the annual exclusion is a simple and useful tool. Any planning around larger lifetime gifts should be coordinated with a tax advisor.
Portability Between Spouses
Married couples have an additional advantage. Through a concept called portability, a surviving spouse can generally use the unused federal exemption of the spouse who passed away first. To preserve that benefit, the estate of the first spouse must file a timely federal estate tax return, even when no tax is owed. This is one of several reasons it is wise to consult an attorney after a spouse’s death rather than assuming nothing needs to be done.
Estate Tax Planning for Most Texas Families
For nearly all Texas families, the practical takeaway is reassuring. Estate tax will not apply, and planning should focus on the things that truly affect your loved ones: a clear will, the right use of trusts, powers of attorney, healthcare directives, and a plan that keeps your family out of avoidable court proceedings.
Ellen Williamson Law focuses on this kind of practical, everyday planning for the great majority of families, rather than complex tax structuring for the very largest estates. Our overview of what estate planning includes shows where most families should put their attention.
Get Help from a Texas Estate Planning Attorney
Our firm helps clients across North Texas build estate plans that fit their real circumstances, without the confusion or unnecessary worry that estate tax myths often create. We work with families through our Dallas estate planning attorney and Dallas trust attorney services, as well as our Farmers Branch estate planning attorney page. We offer flat-fee billing for most planning matters, so the cost is clear before any work begins.
To build a plan that fits your family, contact Ellen Williamson Law to schedule a consultation.