Fulfilling financial obligations is an important element of estate administration. People planning their estates often need to address debts and taxes. The personal representative overseeing probate proceedings has a responsibility to ensure they use estate resources to cover debts and taxes.
Those planning an estate may worry that either the estate itself or their beneficiaries may be subject to taxes.
Are there estate taxes in Texas?
Technically, Texas does not collect a state estate tax. However, larger estates could be subject to federal estate taxes.
As of 2025, any estate worth more than $13.99 million is potentially at risk of estate taxes. The personal representative may need to set aside between 18 and 40% of the total estate value to cover those taxes unless the testator plans ahead of time to reduce the value of the estate and minimize tax obligations.
Are there inheritance taxes in Texas?
Texas does not collect an inheritance tax based on the property passed to beneficiaries. However, if beneficiaries live in other states, an inheritance tax might apply.
It is therefore beneficial for testators planning for beneficiaries in another state and those administering an estate with out-of-state beneficiaries to verify the laws that may apply given where beneficiaries live.
What about other taxes?
There are a few other taxes that might apply to a Texas estate. The estate may have to cover any outstanding income tax obligations owed by the decedent. The estate itself could be subject to income taxes if the representative sells estate assets during probate proceedings.
Depending on the duration of estate administration, the estate may need to cover property taxes. These are annual taxes due to the county, and the estate may need to pay them to keep the property in good standing. Beneficiaries could also be vulnerable to capital gains taxes if they sell inherited property that has accumulated value since its initial acquisition.
Having the right assistance when planning an estate or preparing for estate administration can help ensure that as much as possible passes directly to beneficiaries. Taxes are one of several obligations that can complicate probate proceedings without careful planning.
The wealth management attorneys at Boon Calk Echols Coleman & Goolsby PLLC can provide prospective state planning clients with a free consultation. Learning more about how we can craft an estate plan that fits your unique needs can give you more control over your legacy and peace of mind. For a free consultation, please call us in Longview at 903-704-0592 or reach us through our website. Our team can assist those living throughout East and Northeast Texas.