Houston Estate Planning and Elder Law Attorney Blog
As of January 1, 2026, the federal estate tax exemption is $15 million per person, or $30 million for a married couple, and the change is now permanent. The One Big Beautiful Bill Act, signed in mid-2025, raised the exemption from its 2025 level and canceled the scheduled cut that was set to drop it by roughly half. For the large majority of Texas families, the practical takeaway is reassuring: your estate will owe no federal estate tax.
Even so, the new law is a good reason to look at your plan rather than ignore it. McCulloch & Miller, PLLC helps Texas families align their estate planning with current law, and a higher exemption changes the math for some plans in ways that are easy to miss. Founding partner Thomas McCulloch holds dual credentials as an attorney and a CPA, a combination that fits squarely where estate law and tax meet.
What changed for 2026?
The exemption is the amount you can pass to your heirs, during life or at death, before any federal estate or gift tax applies. For 2026, the One Big Beautiful Bill Act set that amount at $15 million per individual, up from $13.99 million in 2025, and made it permanent, meaning there is no longer a built-in expiration date. The top federal estate tax rate stays at 40% on amounts above the exemption.
| 2025 | 2026 | |
|---|---|---|
| Exemption per person | $13.99 million | $15 million |
| Married couple, with portability | $27.98 million | $30 million |
| Top federal estate tax rate | 40% | 40% |
| Texas state estate tax | None | None |
“Permanent” here means the higher exemption has no scheduled sunset, not that it can never change, since a future Congress could still adjust it. The figure is also indexed for inflation starting in 2027, so it is set to rise over time. The annual gift tax exclusion, a separate allowance, is $19,000 per recipient for 2026.
Who does the federal estate tax actually affect in Texas?
Very few Texas families are affected. With the bar set at $15 million per person and $30 million per married couple, the overwhelming majority of estates fall well under the threshold and owe nothing. Texas adds to that good news: the state has no estate tax and no inheritance tax of its own, so Texas families deal only with the federal rules, unlike residents of states such as Washington or Oregon that impose their own death taxes at much lower levels.
The families who do need to pay attention tend to share a profile: significant wealth concentrated in assets that have grown in value. A successful business, a ranch or farmland that has appreciated for decades, a portfolio of real estate, or a mix of all three can push an estate past the exemption faster than the owners expect. For Texas business owners in particular, much of the value is often tied up in an illiquid company, which raises a harder question than the tax rate alone: where would the cash to pay an estate tax even come from?
Does Texas have a state estate or inheritance tax?
No. Texas does not impose a state estate tax or a state inheritance tax. When a Texas resident dies, the only potential transfer tax at the estate level is the federal one, and that applies only to estates above the $15 million exemption.
This is a real advantage of living in Texas, and it simplifies planning compared with the dozen or so states that levy their own death taxes, often starting well below the federal threshold. It does not remove the value of planning, though, because estate tax is only one of several reasons Texans put an estate plan in place.
Why estate planning still matters when you owe no estate tax
A higher exemption can lull families into thinking their existing documents are fine, when in some cases the opposite is true. Older plans drafted when the exemption was a fraction of today’s can behave in unintended ways now.
The most common trap is a formula clause. Many older wills and trusts say, in effect, fund a trust with the maximum amount the estate tax exemption allows and leave the rest to the spouse. When the exemption was under a million dollars, that split made sense. With a $15 million exemption, the same clause can now route nearly an entire estate into a trust and leave a surviving spouse with far less than the couple intended. There is also the matter of basis step-up: with almost no one owing estate tax, keeping appreciated assets in your estate so heirs receive a stepped-up cost basis often beats giving them away during life. These are the kinds of issues a trust review is meant to catch.
What should Texas families do now?
The right move depends on the size and shape of your estate, but a few steps apply broadly:
- Have any will or trust signed years ago reviewed, especially if it contains a formula or bypass-trust clause tied to the exemption.
- If your spouse has died, ask whether a portability election, made on a federal estate tax return, would preserve their unused exemption for your benefit.
- If your estate may exceed $15 million, talk with an attorney and a tax advisor about whether lifetime gifting or trust strategies fit your goals.
- Confirm that your plan still does the non-tax work you need: naming an executor, planning for incapacity, and keeping your estate out of an unnecessary probate.
Most families will find their plans are sound and need only minor updates. A smaller number, particularly business owners and those with substantial or rapidly appreciating assets, have real planning to do, and the window to do it thoughtfully is open now that the sunset pressure has lifted.
Frequently asked questions about the 2026 estate tax
How much is the federal estate tax exemption in 2026? For 2026, the federal estate tax exemption is $15 million per person and $30 million for a married couple using portability. The amount is permanent, with inflation adjustments beginning in 2027, and the top estate tax rate remains 40%.
Does Texas have an estate tax or inheritance tax? No. Texas has neither a state estate tax nor a state inheritance tax. A Texas resident’s estate is subject only to the federal estate tax, and only if it exceeds the $15 million federal exemption.
Do I still need an estate plan if my estate is under $15 million? Yes. Even with no estate tax owed, an estate plan directs who receives your assets, names an executor and guardians, plans for incapacity, and can keep your estate out of a longer probate. Older plans may also contain clauses that need updating under the higher exemption.
Talk to a Texas estate planning attorney about your plan
A higher, permanent exemption is welcome news, and it is also a prompt to make sure your plan reflects the law as it stands rather than the law as it was when you signed it. The attorneys at McCulloch & Miller, PLLC help Texas families review and update their estate plans, from straightforward wills to planning for estates that exceed the federal exemption. Founding partner Thomas McCulloch holds both a law degree and a CPA license, which lets the firm look at the legal and tax sides of your plan together, and the firm has served Texas families for over 35 years.
Call (713) 333-8900 or request a consultation to review your plan under the current rules. Flat fees are available on many estate planning matters.