Texas Estate
Tax Calculator

Texas does not impose a state estate tax or inheritance tax. The Texas Constitution and Tax Code prohibit a state estate tax, providing enduring certainty for Texas residents.

Combined with no state income tax, Texas is one of the most tax-favorable jurisdictions for estate planning.

Texas's size and economic diversity produce estates ranging from multi-billion-dollar oil and gas fortunes to large-scale agricultural operations, tech company equity, and urban commercial real estate. The state's population growth and rising property values continue to increase the number of estates approaching the federal threshold.

Only the federal estate tax applies to Texas estates. The $15 million exemption with portability and 40% top rate governs.

No state filing is required.

Texas is a community property state, providing the full basis step-up for both halves of community property at the first death. For families with highly appreciated oil and gas interests, ranch land, or tech stock, this step-up can save millions in capital gains taxes and is a central feature of Texas estate planning.

Texas's community property system requires careful characterization of assets, particularly for couples who relocated from common-law states or have complex compensation packages (stock options, carried interests, deferred compensation). Texas recognizes community property agreements, which can convert separate property to community property for basis step-up benefits.

Oil, gas, and mineral interests are a defining feature of Texas estate planning. The Permian Basin, Eagle Ford Shale, and other formations generate substantial wealth that requires specialized valuation.

Mineral rights, royalty interests, working interests, and overriding royalties each have distinct valuation methodologies. Large ranch properties also present complex valuation issues, particularly when development pressure conflicts with agricultural use.

IRC 2032A special use valuation is widely used for qualifying Texas ranches and farms.

Model federal estate tax exposure for Texas estates, including community property analysis and energy asset valuations. Use this calculator free for all states.

Because Texas does not impose a state estate tax, the federal estate tax is the only transfer tax layer. The current federal exemption of $15 million per individual (2025) shelters the vast majority of estates.

However, estates that exceed this threshold face a top marginal rate of 40%, making federal planning essential for high-net-worth Texas residents.

The Tax Cuts and Jobs Act (TCJA) doubled the federal exemption effective 2018, but this increase is scheduled to sunset after 2025. If Congress does not act, the exemption will revert to approximately $7 million (adjusted for inflation).

For Texas residents with estates between $7 million and $15 million, this sunset creates a planning window: transfers made now under the higher exemption will not be clawed back, even if the exemption later decreases.

The absence of a state estate tax in Texas simplifies the analysis — there is no gap between state and federal exemptions to navigate, no separate state return to file, and no risk of double taxation. However, this also means there is no state-level deduction to offset federal liability.

Federal planning tools — marital deductions, charitable deductions, and the unified credit — carry the full weight of estate tax mitigation. Use the Texas estate tax calculator to model current and post-sunset scenarios, and review the Texas probate cost calculator to understand full settlement costs.

Federal portability allows a surviving spouse to inherit the deceased spouse's unused estate tax exclusion (DSUE), effectively doubling the available federal exemption to $30 million for married couples. Electing portability requires filing Form 706 for the first-to-die spouse, even if no federal estate tax is owed — a step that is frequently overlooked when no tax appears to be due.

Because Texas does not impose a state estate tax, there is no state-level portability concern. The federal election is the only one that matters, and it applies automatically to the surviving spouse's estate once made.

This is simpler than in estate-tax states, where the lack of state portability forces the use of bypass trusts to preserve both exemptions.

Despite this simplicity, portability has limitations. The DSUE amount is not indexed for inflation — it locks in at the value of the first spouse's unused exemption at the date of death.

If the surviving spouse remarries and the new spouse dies, the DSUE from the first spouse is lost. For Texas families with significant wealth, bypass trusts may still be preferable to portability because they provide asset protection, generation-skipping benefits, and inflation-adjusted growth outside the surviving spouse's taxable estate.

Use the executor fee calculator and probate cost calculator to understand the full administration picture when comparing trust structures.

Without a state estate tax, Texas residents focus planning efforts on the federal layer. The current $15 million exemption provides substantial shelter, but the scheduled TCJA sunset makes it prudent to accelerate planning.

Irrevocable trusts — including ILITs, SLATs, and QPRTs — remove assets from the taxable estate permanently. Once transferred, these assets and their future appreciation are outside the federal estate, regardless of future exemption changes.

Annual exclusion gifts of $19,000 per recipient (2025) remain the simplest estate reduction tool. Married couples can jointly gift $38,000 per recipient through gift-splitting.

Over a decade, a family gifting to four beneficiaries annually removes $1.44 million from the estate with no gift tax return required. Charitable deductions — whether through outright bequests, donor-advised funds, or charitable trusts — further reduce the taxable estate while supporting philanthropic goals.

GRATs and GRUTs (grantor retained unitrusts) transfer appreciation to beneficiaries at minimal transfer tax cost. For Texas residents holding concentrated stock positions or rapidly appreciating assets, these vehicles are particularly efficient.

Family limited partnerships and LLCs may provide valuation discounts for gift and estate tax purposes, though the IRS scrutinizes these structures closely. Professional valuation and proper documentation are essential.

Model your federal exposure with the Texas estate tax calculator, or find an estate planning attorney in Texas for personalized guidance.