Estate planning basics for Texas families.

Texas families have planning advantages other states' residents don't — no state estate or inheritance tax, an independent administration option that streamlines probate, and a well-developed body of community property law. The same residents also face a few quirks: out-of-state property creates ancillary probate, blended families require careful drafting, and beneficiary designations override wills in ways most people don't expect. The job of the financial plan is to make sure the accounts, titling, and beneficiary forms match the legal documents an estate attorney drafts.

The four core documents — the baseline for every adult

A will (directs what happens to probate assets after death), a durable financial power of attorney (lets an agent manage finances if you're incapacitated), a medical power of attorney (lets an agent make medical decisions), and a HIPAA authorization (lets named people access your medical information). For most Texas families, these four documents — drafted by a qualified Texas estate attorney — are the baseline. Without them, default state rules apply, which are rarely what families would have chosen if asked. Texas also recognizes a Directive to Physicians (living will) and a Declaration of Guardian in case of incapacity, both worth adding.

Revocable living trusts — when they make sense

A revocable trust is a separate legal entity that holds assets you transfer into it. You remain in control during life; at death (or incapacity) a successor trustee takes over. The trust assets pass outside probate, which provides privacy and speed. Texas's probate process — particularly independent administration with a self-proven will — is among the most efficient in the country, so the probate-avoidance case for trusts is weaker in Texas than in California or New York. Trusts are still useful for: real property in multiple states (avoiding ancillary probate in those states), privacy from public probate records, incapacity planning when you want a smoother handoff than a power of attorney provides, and blended-family situations where you need to control how assets are eventually distributed to children from a prior marriage.

Community property — the Texas-specific framework

Texas is one of nine community-property states. The general rule: property acquired during marriage is presumed community property (each spouse owns an undivided one-half interest), while property owned before marriage or received by gift or inheritance during marriage is separate property. The character of an asset affects two things that matter: each spouse can only devise their one-half of community property (the other spouse's half passes to that spouse), and the step-up-in-basis treatment at the first spouse's death applies to the full value of community property — not just the deceased spouse's half. This double-step-up is a meaningful Texas advantage; it requires that the asset be properly characterized as community property at death.

Beneficiary designations — the single most common error

Retirement accounts (IRAs, 401(k)s, Roth IRAs), life insurance policies, annuities, and pay-on-death or transfer-on-death account titlings pass by beneficiary designation, not by the will. A will that says 'I leave everything to my children' has no effect on an IRA whose beneficiary form still names an ex-spouse from 25 years ago. The IRA goes to the ex-spouse. The most common estate-planning errors I see: out-of-date primary beneficiaries (frequently an ex-spouse, deceased parent, or wrong-percentage allocation among children), missing contingent beneficiaries (so a deceased primary beneficiary's share goes through the will rather than directly to the substitute), and minor children named directly (creating court supervision issues rather than passing through a trust). Inherited IRA rules compound the cost of getting beneficiaries wrong.

Federal estate tax — the 2026 cliff

The federal estate-tax exemption is $13.99M per person in 2025, scheduled to drop to roughly $7M (inflation-adjusted) on January 1, 2026 unless Congress acts. Married couples get two exemptions, plus portability (the surviving spouse can claim the deceased spouse's unused exemption with a timely-filed Form 706). Most Texas families fall well under either threshold and have no federal estate tax exposure. For families with estates approaching or exceeding the exemption — including business owners, multi-generational landowners, and households with significant real-estate equity — the 2026 reduction creates urgency around lifetime gifting strategies, irrevocable trusts (SLATs, dynasty trusts, IDGTs), and use-it-or-lose-it use of the higher exemption before the reduction. The IRS has confirmed gifts made under the higher exemption won't be clawed back if the exemption later drops — making 2025–2026 a meaningful planning window.

Texas-no-state-estate-tax — the genuine advantage

Texas has no state estate tax and no state inheritance tax — and no state income tax, so trust income earned and accumulated in Texas isn't subject to state income tax. This is meaningfully better than the situation in states like Washington (state estate tax with a $2.193M exemption), Massachusetts ($2M), Oregon ($1M), or Pennsylvania (inheritance tax with no exemption for most beneficiaries). For families considering relocation from a state-estate-tax state to Texas, the long-run tax savings can be substantial — see the broader Texas tax discussion.

Independent administration — Texas probate's superpower

A will drafted with the language 'I direct that no other action shall be had in the County Court in relation to the settlement of my estate than the probating and recording of this Will and the return of an inventory, appraisement and list of claims of my estate' triggers independent administration. Under independent administration, the executor handles the estate without ongoing court supervision after the initial probate filing — paying debts, selling assets, distributing inheritances — at a pace and cost dramatically lower than the supervised administrations required in most other states. Texas wills should almost always include this language; ones drafted in other states often don't.

Charitable strategies

For charitably-inclined families, several Texas-friendly tools: qualified charitable distributions (QCDs) from IRAs starting at 70½, donor-advised funds for bunching contributions in high-income years, charitable remainder trusts for retained-income with reduced tax cost, and outright bequests by will or beneficiary designation (a charity-named-as-beneficiary on a traditional IRA receives the funds tax-free, while individual heirs would owe ordinary income tax on the same funds).

Special situations to flag for the attorney

Blended families with children from prior marriages — qualified terminable interest property (QTIP) trusts or other structures can provide for a surviving spouse while preserving inheritance for first-marriage children. Beneficiaries with special needs — direct inheritance can disqualify the beneficiary from means-tested benefits; a third-party special-needs trust solves this. Beneficiaries with creditor or divorce concerns — discretionary trusts provide protection. Out-of-state real property — consider holding through an LLC or transferring to a revocable trust to avoid ancillary probate. Significant retirement-account balances — see-through trust language is important if a trust is named as beneficiary of an IRA.

What I coordinate vs. what the attorney drafts

Estate plans must be drafted by a qualified Texas estate attorney — that's not a service I provide, and it's not a place to economize. My role is the coordination layer: making sure the IRA, 401(k), and Roth beneficiary designations match the plan the attorney designed, that account titling reflects the community/separate characterization the documents assume, that life insurance beneficiaries are current and named in the correct order (primary, contingent, ultimate), and that the executor named in the will actually has access to the information they'll need. We review this annually — beneficiary forms drift surprisingly quickly.