Texas is considered a “tax-friendly” state for both individuals (particularly retirees) and businesses. In addition to not having a state income tax, it also has no estate or inheritance tax.
Last November, the voters of Texas approved a ballot proposition (Prop 8) that codifies those estate and inheritance tax protections that were already in place in an amendment to the state constitution. That means lawmakers can’t vote to implement these taxes in the future – for example, if the state needs money or politicians come into power that advocate for what’s commonly known as a “death tax.”
An advantage to long-term legacy planning
The amendment prohibits taxes on a decedent’s property or the transfer of an estate, inheritance or gift. Some advocates for adding this law to the constitution pointed out that by eliminating the possibility that the legislature could change the law in the future, it helps people who craft their estate plan with an eye toward handing down wealth to future generations.
That could include children and grandchildren or many future generations. It also helps with long-term business succession planning.
The federal estate tax
Texas estates valued at more than $15 million (for 2026) may still be subject to the federal estate tax for the amount over that exemption limit, which typically increases each year. There are various ways to minimize or even eliminate the taxable portion of an estate.
That’s just one reason why having experienced estate planning guidance is critical for Texans to ensure that their heirs and other beneficiaries are able to receive the maximum possible benefits from the legacy they leave behind. This guidance also helps ensure that an estate plan meets the unique needs and goals of the person who creates it.