Estate Planning and Taxes in Texas: What Households and Business Owners Coordinate With Their Attorney and CPA

The IRS describes the estate tax as a tax on the right to transfer property at death. It starts with an accounting of what a person owns or has certain interests in at death, measured at fair market value. Deductions can include debts, estate administration expenses, and property that passes to a surviving spouse or to qualified charities. The value of lifetime taxable gifts is then added, the tax is computed, and the result is reduced by the available unified credit. Source: IRS, Estate tax, reviewed November 3, 2026.

Whether a federal return is needed depends on a filing threshold. The IRS lists $15,000,000 for decedents dying in 2026, and states that most relatively simple estates do not require a return. The same page notes that a spouse's unused exclusion may be passed to a surviving spouse through an election made on a timely filed estate tax return (often called portability). Source: IRS, Estate tax, reviewed November 3, 2026. The IRS also reports a basic exclusion amount of $15,000,000 for 2026 (IRS, tax inflation adjustments for tax year 2026, IR-2025-103, October 9, 2025, reviewed November 3, 2026). Exclusion amounts are set by law and indexed, so they can change in later years.

The gift tax is a separate but connected tax on transfers made during life for less than full value. The IRS lists a 2026 annual exclusion of $19,000 per recipient, and $38,000 per recipient when two spouses give property they own together. Gifts within the annual exclusion, gifts to a spouse, and certain tuition and medical payments made directly to the provider are generally not taxable gifts. Source: IRS, Frequently asked questions on gift taxes, reviewed November 3, 2026. Estate and gift tax rules interact, and a household near the thresholds, or one that expects asset values to grow, may want a professional review. This section is general education and does not state what applies to any household.

No. The Texas Comptroller reports that the Texas inheritance tax was repealed effective September 1, 2015, under Senate Bill 752. Source: Texas Comptroller of Public Accounts, bulletin on the inheritance tax repeal, reviewed November 3, 2026. The bill text repealed Chapter 211 of the Tax Code: Texas Legislature, S.B. 752, reviewed November 3, 2026.

That does not make Texas estates tax-free. Federal estate and gift tax can still apply to large estates, income tax can apply to some assets that pass to heirs, and property or a residence in another state may be subject to that state's own rules. The practical Texas planning topics tend to be community property, how assets are titled, probate procedures, and beneficiary designations. For the probate and role questions, see trustee vs. executor in Texas, and for attorney pricing and documents, see what estate planning costs in Texas.

Texas law can change, so a household should confirm the current position with a Texas attorney or a qualified tax professional when it makes decisions.

Basis is generally what was paid for an asset, and it determines the taxable gain or loss when the asset is sold. For property inherited from a decedent, the IRS states that basis is generally the fair market value on the date of death, whether or not an estate tax return is filed. That value can be higher than the decedent's basis (often called a step-up) or lower (a step-down). If the estate files Form 706 and elects it, the alternate valuation date may apply instead. Sources: IRS, Gifts & inheritances and IRS, Publication 551, Basis of Assets, reviewed November 3, 2026.

Property received as a gift is generally treated differently. The IRS explains that the recipient's starting basis is generally the donor's adjusted basis, with special rules when the property's value at the time of the gift is lower than that basis. Source: IRS, Publication 551, reviewed November 3, 2026. As a result, giving an appreciated asset during life and leaving it at death can lead to different income tax outcomes for the person who receives it. Neither approach is better in every case, because a gift may serve other goals and an inheritance depends on the owner's circumstances at death.

Texas is a community property state. The IRS states that when either spouse dies, the total value of community property, including the surviving spouse's half, generally becomes the basis of the entire property, provided at least half of the value is includible in the decedent's gross estate. Source: IRS, Publication 551, Community Property, reviewed November 3, 2026. Whether property is community or separate, and how it is titled, can therefore affect basis. The IRS also lists exceptions, such as certain property given to the decedent within one year before death, so a CPA should review the facts before any asset is retitled or sold.

Retirement accounts and life insurance generally pass by beneficiary designation rather than by will. The Texas State Law Library describes this kind of nonprobate property in its guide (Texas State Law Library, Nonprobate Property, reviewed November 3, 2026). An outdated designation can send an account to someone the household no longer intends, and a designation can override what a will says about the same account.

The income tax side is separate from the estate tax. The IRS states that withdrawals from retirement accounts are included in taxable income except for any part that was already taxed or can be received tax-free, such as qualified distributions from designated Roth accounts. For IRA owners and plan participants who die after December 31, 2019, the IRS states that the entire balance generally must be distributed within ten years, with exceptions for a surviving spouse, a minor child, a disabled or chronically ill person, and a person not more than ten years younger than the owner. Beneficiaries of Roth accounts are also subject to required distribution rules. Source: IRS, Retirement plan and IRA required minimum distributions FAQs, reviewed November 3, 2026.

Timing therefore matters for the people who inherit, because a larger account can mean larger taxable withdrawals within a set period. Naming a trust as beneficiary can change the rules that apply, and an attorney and CPA should review it first. Households with pre-tax accounts sometimes compare options such as Roth conversions during life, each with its own trade-offs, as covered in the Roth conversion guide. A conversion adds taxable income in the year it happens and is not appropriate for every household.

Gifting during life is one way households move assets to family. Gifts within the annual exclusion are generally not taxable gifts, and the IRS notes that making a gift does not ordinarily affect the donor's federal income tax and that gifts cannot be deducted other than qualifying charitable contributions. Larger gifts may require a gift tax return even when no tax is due. The IRS states that a donor generally must file Form 709 when gifts to one person exceed the annual exclusion (which is $19,000 for 2026), with exceptions for items such as spousal gifts and qualifying education and medical payments. Sources: IRS, Frequently asked questions on gift taxes and IRS, Gifts & inheritances, reviewed November 3, 2026.

Giving up an asset also has costs. The donor loses access to it, the recipient may take over the donor's lower basis, and lifetime taxable gifts are added back when the estate tax is computed, according to the IRS estate tax page above. A gift is also hard to reverse.

Charitable giving is another category. The IRS notes that property passing to qualified charities can be a deduction in computing the taxable estate, and that gifts to qualifying charities are deductible from the value of the gifts made. Income tax charitable deductions follow separate rules and limits, and the form of the gift (cash, appreciated property, or a gift made through a charitable arrangement) can change the tax result. An attorney can describe the legal arrangements available, and a CPA can review the tax effect. This article does not recommend any gift or arrangement.

For a business owner, the business is often the largest asset and the least liquid. The IRS states that the gross estate can include business interests, and that the value of some operating business interests may be reduced for estates that qualify. Source: IRS, Estate tax, reviewed November 3, 2026. Whether a particular business qualifies for any special treatment is a question for a tax professional.

Several topics usually need to line up. Ownership and governance documents should match the estate plan. The value of the business interest may need to be supported by an appraisal. Heirs may need cash for taxes, debts, or buying out co-owners, which is a liquidity question. Retirement plan design, insurance owned by or for the business, and a possible sale or transfer to family or employees can each carry income tax and legal consequences. Each is a separate decision with its own trade-offs.

For related reading, see the planning for business owners page, the guide to business exit planning for Austin business owners, and the resource on family business succession planning. Timing, valuation, and tax treatment depend on the entity, the owners, and current law, and none of these resources promises a result.

An estate attorney advises on the law and prepares documents such as wills, trusts, and powers of attorney. A CPA addresses tax questions and often prepares returns such as estate, gift, and income tax filings. The IRS makes a similar point in its gift tax guidance, noting that the attorney usually handles wills, trusts, and transfer documents, while the CPA often handles return preparation, and that other professionals such as financial advisors may also be involved. Source: IRS, Frequently asked questions on gift taxes, reviewed November 3, 2026.

A financial planner works on the financial picture around those roles: listing accounts, checking beneficiary designations and titling against the attorney's documents, modeling income and liquidity needs, and preparing questions for the attorney and CPA. A planner does not give legal advice or prepare legal documents. For more detail, see can a financial advisor help with estate planning.

Ankerstar Wealth works with an estate attorney and a CPA and brings them into the planning process when a household's situation calls for it. The estate planning and tax planning pages describe how that coordination works. Legal services are provided by a separate law practice, under a separate engagement. Legal and tax advice is individual to each client. Coordination can add fees and steps, requires the household's consent to share information, and does not guarantee a particular tax or legal result.

1. List every account, business interest, and major asset, with how each is titled and an estimate of its value. 2. Note which assets are community property and which are separate property. 3. Gather the current beneficiary and contingent beneficiary designations for each retirement account and insurance policy. 4. Locate existing estate documents and note their dates and the people named in each role. 5. Write down any gifts made in the past few years, including amounts, recipients, and any gift tax returns filed. 6. Note the purchase price or original cost of appreciated assets, since basis can matter for heirs. 7. Identify any property, residence, or business interest in another state. 8. For a business, gather ownership agreements, recent valuations, and the plan for ownership after a transition. 9. List the tax questions that depend on timing or asset type so a CPA can review them. 10. Confirm which professional handles legal, tax, and planning questions, and under which engagement.

This checklist is educational. It is not a recommendation for any household, and it does not replace advice from a licensed Texas attorney or a qualified tax professional.

If you are reviewing an estate plan, start with the estate planning page, and see the tax planning page for how tax questions are coordinated. The calculators page can help organize assumptions, though a calculator result is an estimate based on the inputs entered, not a prediction. To ask a question or request an inquiry, use the contact page.

The opinions in this article are the advisor's own and are not personal financial, tax, or legal advice. The article is educational, does not recommend any strategy, gift, trust, or account change, and does not promise any tax result or savings. Dollar figures are published by the IRS as of the dates shown and may change. Consult a licensed Texas attorney and a qualified tax professional before acting.