In Texas, whether or not estate taxes will need to be paid when you die greatly depends on the size of your estate. Luckily for the vast majority of us, there is no need to worry.
First of all, there is not an estate tax, sometimes called a “death tax”, at the state level if you live in Texas. So you don’t have to worry about any of the money in your estate going to Austin after you pass.
However, when it comes to money possibly going to Washington, DC there are concerns for a very select few. For 2017, there is a $5.49 million federal exemption for individuals and a $10.98 million for married couples. And these amounts are set to go up every year at the rate of inflation. So as of now if you’re single and worth less than $5.49 million or if you’re married and your joint assets are worth less than $10.98 million, you have nothing to worry about as far as estate taxes are concerned.
If you’re part of the less than 1% of the population whose estate value does go over these thresholds, well first of all, that’s a nice problem to have. Second of all, there still are estate planning strategies available to help you reduce and possibly even eliminate the amount of estate taxes that your estate will have to pay.
For most of us though, as you can see, there’s no need to worry about having to pay estate taxes. Having said that however, if you want to ensure that as much money as possible gets left to the loved ones of your choice, then you still need a proper will and possibly other estate planning documents in place. Otherwise, time and money will get unnecessarily wasted settling your affairs when you pass away. Likewise, the remaining assets will likely not go completely where you would have wanted them to go.