Texas Estate Tax: Everything You Need to Know

The state of Texas does not have an estate tax, however residents may still be subject to federal estate tax laws. If you live in Texas and are thinking about estate planning, this guide will walk you through what you need to know. If you think you need help with estate planning or general financial planning, you may want to consider getting a financial advisor. SmartAsset’s free matching tool can pair you with financial advisors who serve your area.

Texas Estate Tax

Texas does not levy an estate tax. It is one of 38 states with no estate tax.

What Is the Estate Tax?

The estate tax, sometimes referred to as the “death tax,” is a tax levied on the estate of a recently deceased person before the money passes on to their heirs. It only applies to estates that reach a certain threshold.

The estate tax is different from the inheritance tax, which is taken by the government after money or possessions have been passed on to the deceased person’s heirs.

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Texas Inheritance Tax and Gift Tax

There is also no inheritance tax in Texas. However other states’ inheritance taxes may apply to you if a loved one who lives in those states leaves you money, so make sure to check that state’s laws. For example, in Pennsylvania, there is a tax that applies to out-of-state inheritors. If you have a loved one who dies in Pennsylvania and leaves you money, you may owe taxes to that state.

Texas also has no gift tax, meaning the only gift tax you have to worry about is the federal gift tax. The gift tax exemption for 2026 is $19,000 per recipient. Gifting more than that to any individual person in a single year means that the amount over the limit counts against your lifetime exemption, which is $15 million for 2026.

Federal Estate Tax

Regardless of the size of your estate, you won’t owe estate taxes to the state of Texas. You might owe money to the federal government, though. The federal estate tax only kicks in at $15 million for deaths in 2026 and $13.99 million in 2025. In other words, if an estate surpasses that number, any value above that mark is subject to the estate tax. Estates worth less than that pay nothing to the federal government.

This benefit may be portable for married couples. If certain legal steps are taken with a portability election, the surviving partner could access remaining portions of their deceased spouse’s exclusion. As of 2026, each individual has a $15 million exemption. If one dies having used only $5 million of their allotment, the survivor adds that unexercised $10 million to their own $15 million entitlement, totaling $25 million. Without this provision, such amounts would be forfeited. Estates exceeding available thresholds face a 40% federal rate.

Let’s say your estate is worth $17.61 million and you don’t have a spouse. Subtracting the 2026 exemption of $15 million, you have a taxable estate of $2.61 million. Consulting the chart below, you’re in the highest bracket. Your base payment on the first $1 million is $345,800. You also pay 40% on the remaining $1.61 million, which comes to $644,000. That, plus the base of $345,800, means your total tax burden is $989,800.

Taxable Estate	Base Tax Paid	Marginal Tax Rate	Bracket Begins At
$1 – $10,000	$0	18%	$1
$10,001 – $20,000	$1,800	20%	$10,001
$20,001 – $40,000	$3,800	22%	$20,001
$40,001 – $60,000	$8,200	24%	$40,001
$60,001 – $80,000	$13,000	26%	$60,001
$80,001 – $100,000	$18,200	28%	$80,001
$100,001 – $150,000	$23,800	30%	$100,001
$150,001 – $250,000	$38,800	32%	$150,001
$250,001 – $500,000	$70,800	34%	$250,001
$500,001 – $750,000	$155,800	37%	$500,001
$750,001 – $1,000,000	$248,300	39%	$750,001
Over $1,000,000	$345,800	40%	$1,000,001

*The taxable estate is the total above the 2026 federal exemption of $15 million.
**The rate threshold is the point at which the marginal estate tax rate kicks in.

Overall Texas Tax Picture

Texas is a very tax-friendly state, especially for retirees. There’s no state income tax in Texas, so there won’t be taxes on Social Security and other retirement income. Keep in mind that you’ll still be paying federal income tax. However, not owing any money to the state can be a relief, especially for those on a specific income in retirement.

Property tax, though, is a different story. The state has some of the highest property taxes in the country. The property tax in Texas averages an effective rate of 1.40%, which is one of the nation’s highest marks. Finally, the state sales tax base is 6.25%, but with local taxes can get as high as 8.25%.

How a Financial Advisor Can Help With Estate Planning in Texas

Texas has no state estate or inheritance tax, but that does not mean estate planning is unnecessary. A financial advisor working alongside an estate planning attorney can help Texas residents structure their affairs to avoid probate, protect assets and reduce federal estate tax exposure for larger estates.

Take Advantage of Texas Community Property Rules

What an advisor can do: Help married couples understand how Texas community property law affects how assets are titled, how they pass at death and how the stepped-up basis rules interact with community property to potentially reduce capital gains taxes for surviving spouses.
Example: A married couple in Austin holds significant investment accounts. An advisor reviews how the accounts are titled and confirms that community property treatment allows both spouses’ shares to receive a full step-up in basis at the first spouse’s death, potentially eliminating a large embedded capital gain that would otherwise be taxable when the surviving spouse sells.

Plan Around the Federal Estate Tax Threshold

What an advisor can do: For estates approaching the $15 million federal exemption, model the impact of lifetime gifting strategies using the $19,000 annual exclusion per recipient, and evaluate whether trust structures or other planning tools can reduce the taxable estate before the federal threshold applies.
Example: A business owner in Houston has an estate currently valued at $13 million. An advisor projects that continued business growth could push the estate above the federal exemption within several years and recommends a systematic gifting program that transfers assets to adult children annually, reducing the taxable estate while the owner retains sufficient liquidity for retirement.

Maximize Spousal Portability of the Federal Exemption

What an advisor can do: Help married couples take the necessary legal steps to preserve both spouses’ federal exemptions, since portability allows a surviving spouse to use any unused portion of the deceased spouse’s $15 million exemption, protecting up to $30 million combined as of 2026.
Example: A couple in Dallas has a combined estate of $22 million. An advisor helps them confirm that the portability election will be filed properly after the first spouse’s death, preserving the full $30 million combined exemption and avoiding federal estate tax on an estate that would otherwise exceed the single exemption threshold.

Structure Assets to Avoid Texas Probate

What an advisor can do: Help you set up payable-on-death designations, transfer-on-death accounts, joint tenancy arrangements or a revocable living trust so that key assets pass directly to beneficiaries without going through the Texas probate process, saving time and cost for your heirs.
Example: A retiree in San Antonio holds a $250,000 brokerage account and wants it to pass directly to her two children without court involvement. An advisor sets up a transfer-on-death designation on the account, ensuring the funds pass outside of probate while keeping the asset fully accessible during the retiree’s lifetime.

Review Beneficiary Designations Across All Accounts

What an advisor can do: Conduct a comprehensive review of beneficiary designations on retirement accounts, life insurance policies and other assets to confirm they reflect current wishes, since these designations pass assets outside of a will and override whatever the will says.
Example: A widower in Fort Worth updated his will after remarrying but never changed the beneficiary designation on his 401(k), which still lists his late wife. An advisor identifies the outdated designation during an annual review and helps him update it so the account passes to his intended beneficiaries rather than creating a legal dispute among family members.

Bottom Line

Estate planning in Texas requires understanding federal tax implications, even without state-level estate taxes.

Texas does not impose an estate tax or an inheritance tax, but estate planning can still play an important role, particularly if you have a large estate or want to simplify how assets pass to your heirs. Federal estate tax rules may apply to estates that exceed the federal exemption, while beneficiary designations, probate planning and community property rules can also affect how your estate is handled. A financial advisor can work with an estate planning attorney to help you develop a strategy that reflects your financial goals and your family’s needs.

Estate Planning Tips

If you’re planning an estate or just looking to get help with financial planning in general, a financial advisor can help. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals,get started now.
Planning an estate is not just for the old. In fact, you should start thinking about your estate plan when you’re younger, so that you will be prepared as you move into your later years.