Dallas Estate Tax Planning Attorneys

How Can Estate Tax Planning Help Protect My Family’s Wealth in Texas?

Estate tax planning can help Dallas families, business owners, and real estate investors reduce unnecessary taxes, preserve appreciating assets, and transfer wealth more efficiently to future generations. In 2026, the federal estate and gift tax exemption is $15 million per person, but families may still need careful planning to preserve both spouses’ exemptions, address capital gains, protect business or real estate interests, and ensure there is enough liquidity to pay taxes and expenses after death. The Ashmore Law Firm, P.C. helps clients coordinate wills, trusts, lifetime gifting, portability, business succession, and other estate planning strategies based on their assets, family structure, and long-term goals.

Protecting Your Family, Business, and Legacy Through Strategic Tax Planning

Estate tax planning is not just about determining whether your estate exceeds the federal exemption. It is about understanding how your assets are owned, how they may grow, what taxes could apply, and whether your family will have the liquidity and legal authority needed to carry out your plan.

At The Ashmore Law Firm, P.C., our Dallas estate planning attorneys help families, business owners, executives, real estate investors, and individuals with significant or appreciating assets develop coordinated estate and tax-planning strategies.

A carefully structured plan may help you:

• Reduce unnecessary estate, gift, capital gains, and income-tax exposure

• Transfer wealth to children and future generations

• Protect inherited assets for beneficiaries

• Prepare for the transition of a family business

• Preserve real estate and other illiquid assets

• Use both spouses’ available federal estate tax exemptions

• Provide liquidity for taxes, expenses, and administration

• Coordinate charitable giving with family goals

Our goal is not to recommend complicated documents simply because they are available. It is to determine which strategies fit your assets, family relationships, tax exposure, and long-term intentions.

What Is Estate Tax Planning?

Estate tax planning is the process of arranging your assets and legal documents to reduce potential transfer taxes and preserve more of your property for your intended beneficiaries.

A complete estate tax plan may address more than the federal estate tax. Depending on your circumstances, it may also consider:

• Federal gift taxes on lifetime transfers

• Generation-skipping transfer taxes

• Capital gains taxes associated with appreciated property

• Income earned by estates and trusts

• Retirement-account income taxes

• Property located in states with their own estate or inheritance taxes

• Business valuation and succession issues

• Liquidity needed after a death

These taxes do not all work the same way. A strategy that reduces estate tax could create an unfavorable income-tax or capital-gains result if it is not properly evaluated. Estate tax planning should therefore be coordinated with your overall estate plan, financial plan, business plan, and tax advice.

What Is the Federal Estate Tax Exemption for 2026?

For deaths occurring in 2026, the federal estate and gift tax basic exclusion amount is $15 million per individual.

This means an individual may generally transfer up to $15 million through a combination of lifetime taxable gifts and transfers at death before federal estate or gift tax is imposed. Transfers above the available exemption may be subject to a federal tax rate of up to 40%.

The exemption applies to the combined value of taxable lifetime gifts and the taxable estate at death. It is not a separate $15 million exemption for gifts and another $15 million exemption at death.

Can a Married Couple Protect $30 Million?

A married couple may potentially protect up to $30 million in 2026, but the exemptions are individual and must be used or preserved correctly.

The first spouse’s unused exemption does not automatically transfer to the surviving spouse. To preserve it through portability, the deceased spouse’s estate generally must file a timely federal estate tax return, Form 706, and make the portability election.

This filing may be valuable even when no estate tax is due after the first spouse’s death.

Portability can be an important part of a plan, but it may not replace trust planning in every situation. Trusts may offer additional advantages involving asset protection, appreciation, remarriage, blended families, generation-skipping planning, or control over how inherited property is used.

What Is the 2026 Annual Gift Tax Exclusion?

For 2026, an individual may give up to $19,000 per recipient under the federal annual gift-tax exclusion.

A married couple may potentially give up to $38,000 per recipient when the gifts are properly structured and gift-splitting requirements are satisfied.

For example, a married couple with three children could potentially transfer $114,000 in 2026 using both spouses’ annual exclusions:

• $38,000 to the first child

• $38,000 to the second child

• $38,000 to the third child

Annual exclusion gifts generally do not reduce the donor’s lifetime estate and gift tax exemption. However, gifts above the annual exclusion do not necessarily create an immediate tax bill. The excess may instead reduce the donor’s remaining lifetime exemption and may require the filing of a federal gift-tax return.

Gifts That May Be Excluded Separately

Certain payments may receive separate treatment when made correctly, including:

• Tuition paid directly to an educational institution

• Qualifying medical expenses paid directly to a medical provider

• Transfers to a U.S.-citizen spouse

• Qualifying charitable contributions

The details matter. Giving money to a family member so that the family member can pay tuition or medical expenses may not receive the same treatment as paying the institution or provider directly.

Does Texas Have an Estate or Inheritance Tax?

Texas currently does not impose a separate state estate tax or inheritance tax.

Texas residents may still be subject to federal estate tax. Taxes or filing obligations may also arise when a Texas resident owns real estate or other property in a state that imposes its own estate or inheritance tax.

Even when an estate will not owe federal estate tax, tax planning may remain important because of:

• Capital gains exposure

• Retirement-account taxation

• Trust income

• Business succession

• Out-of-state property

• Portability

• Property valuation

• Liquidity needs

• The future appreciation of assets

What Property Is Included in a Taxable Estate?

A taxable estate may include much more than cash held in a bank account. The federal gross estate may include the value of property and interests owned or controlled at death, such as:

• Homes and other real estate

• Ranches, farms, and mineral interests

• Bank and brokerage accounts

• Retirement accounts

• Closely held businesses

• Partnership and limited liability company interests

• Stocks, restricted stock, and other investments

• Life insurance in certain circumstances

• Trust interests

• Personal property and valuable collections

• Notes receivable and other financial rights

• Certain property transferred before death

An estate can therefore exceed the federal exemption even when the family does not have enough available cash to pay a tax bill.

Estate Tax Planning for Business Owners

For many Dallas business owners, the company is both a source of income and one of the family’s largest assets. That can create difficult questions:

• Who will own the business after the owner’s death?

• Who will manage it?

• Should ownership pass equally among children?

• What happens when some children work in the business and others do not?

• How will the business be valued?

• Will the estate have enough liquidity to pay taxes and expenses?

• Could the family be forced to sell the company or borrow against it?

Business succession planning may involve:

• Buy-sell agreements

• Ownership and governance restructuring

• Trust planning

• Lifetime transfers

• Voting and nonvoting ownership interests

• Life insurance

• Valuation planning

• Management succession

• Coordination with corporate documents

• Planning for a future sale or liquidity event

A succession plan should address both tax efficiency and practical control. Transferring ownership without establishing a clear management structure can create conflict even when the transfer reduces taxes.

Estate Tax Planning for Real Estate Owners

Dallas-area families may hold substantial wealth in commercial buildings, rental properties, development land, ranches, mineral interests, or family residences.

Real estate creates distinct planning concerns because it may:

• Appreciate significantly

• Produce income but limited available cash

• Be difficult to divide among multiple beneficiaries

• Carry debt or environmental obligations

• Be owned through several entities

• Be emotionally important to the family

• Require ongoing management after an owner’s death

Planning may include reviewing how each property is titled, whether an entity should own it, who should manage it, how expenses will be paid, and whether beneficiaries should receive the property directly or through a trust.

Capital Gains and the Importance of Tax Basis

Estate-tax reduction should not be considered separately from capital-gains planning.

Property inherited from a deceased owner generally receives a new tax basis based on its fair market value at the date of death, subject to applicable exceptions and elections. This is often called a “step-up in basis,” although the basis could move up or down depending on the property’s value.

By contrast, property given during life generally carries over the donor’s basis.

Consider a simplified example:

A parent purchased property for $500,000, and it is now worth $2 million.

If the parent gives the property to a child during life, the child may receive the parent’s existing basis. If the child later sells the property, a significant taxable gain could result.

If the child inherits the property after the parent’s death, the property may receive a basis associated with its date-of-death value, potentially reducing the capital gain on a later sale.

This does not mean that holding every asset until death is always best. It means lifetime gifting decisions should account for both estate-tax savings and potential capital-gains consequences.

Estate Tax Planning Strategies

The right strategy depends on the value and type of assets, anticipated appreciation, family dynamics, charitable goals, and desired level of control.

Potential strategies may include the following.

Lifetime Gifting

Lifetime gifts may move assets and future appreciation outside the taxable estate. Gifting can be particularly useful when an asset is expected to increase substantially in value.

Before making a gift, it is important to evaluate:

• The donor’s continuing financial needs

• The recipient’s maturity and circumstances

• Creditor and divorce exposure

• Gift-tax reporting

• Tax basis

• Control over the property

• The effect on other beneficiaries

Irrevocable Trusts

An irrevocable trust may be used to transfer property outside the taxable estate while establishing rules for how beneficiaries receive and use it.

Depending on the structure, a trust may support:

• Multi-generational planning

• Asset protection

• Management for younger beneficiaries

• Protection from a beneficiary’s divorce or creditors

• Control over distributions

• Tax-efficient transfers of appreciating assets

Irrevocable does not necessarily mean inflexible, but these trusts require careful drafting, administration, and coordination with tax professionals.

Irrevocable Life Insurance Trusts

Life insurance can provide cash after a death, but the death benefit may be included in the insured person’s taxable estate when the insured owns or controls the policy.

An irrevocable life insurance trust may be used in appropriate circumstances to own insurance outside the insured’s taxable estate and provide liquidity for beneficiaries or estate expenses.

Ownership, beneficiary designations, premium payments, trustee responsibilities, and existing-policy transfers must be handled carefully.

Grantor Retained Annuity Trusts

A grantor retained annuity trust, commonly called a GRAT, may be used to transfer future appreciation while the person creating the trust retains an annuity payment for a stated period.

GRATs may be considered for assets that are expected to appreciate, including certain business or investment interests. Their effectiveness depends on valuation, performance, interest rates, and proper administration.

Spousal Lifetime Access Trusts

A spousal lifetime access trust, or SLAT, may allow one spouse to transfer assets to an irrevocable trust for the other spouse and other beneficiaries.

A SLAT may remove property and future appreciation from the donor spouse’s taxable estate while permitting the beneficiary spouse to receive distributions under the trust’s terms.

Couples should carefully consider access, divorce, death, trustee selection, and the restrictions that apply when creating similar trusts for each other.

Family Entities

Family limited partnerships and limited liability companies may help families consolidate management, establish governance rules, and transfer ownership interests over time.

These entities are not automatic tax-reduction devices. They must have legitimate purposes, accurate records, proper administration, and defensible valuations.

Charitable Planning

Charitable planning can allow a family to support meaningful causes while potentially reducing income, gift, or estate-tax exposure.

Options may include:

• Direct charitable gifts

• Donor-advised funds

• Private foundations

• Charitable remainder trusts

• Charitable lead trusts

• Charitable beneficiary designations

The appropriate method depends on whether the donor wants an immediate deduction, continuing income, long-term family participation, or a gift made after death.

Planning for Estate Tax Liquidity

Federal estate tax is generally paid in cash. Families whose wealth is concentrated in a business, real estate, ranchland, or other illiquid property may have substantial assets but insufficient available cash.

Without a liquidity plan, beneficiaries may need to:

• Sell property quickly

• Borrow against business or real estate assets

• Divide or liquidate investments

• Use personal funds

• Negotiate among family members

• Sell an asset the family intended to preserve

Potential liquidity sources may include:

• Life insurance

• Cash reserves

• Marketable investments

• Business distributions

• Planned asset sales

• Lines of credit

• Buy-sell agreement funding

A federal estate-tax return is generally due nine months after the date of death. An extension to file may be available, but an extension to file does not necessarily postpone the obligation to pay the estimated tax.

Portability and Form 706

Portability allows a surviving spouse to use a deceased spouse’s unused federal estate and gift-tax exemption, referred to as the deceased spousal unused exclusion amount.

Portability generally requires the deceased spouse’s estate to file Form 706 and make the election, even when the estate is below the federal filing threshold and does not owe estate tax.

Families should evaluate portability promptly after the first spouse’s death. Waiting until the surviving spouse’s estate has grown may leave fewer or more complicated options.

Portability also does not transfer the deceased spouse’s unused generation-skipping transfer tax exemption. Families planning for grandchildren or later generations may need additional trust planning.

When Should You Review Your Estate Tax Plan?

Estate planning is not a one-time transaction. A plan should be reviewed when tax laws, asset values, ownership, or family circumstances change.

Consider reviewing your plan after:

• A marriage or divorce

• The death or incapacity of a spouse

• The birth or adoption of a child or grandchild

• A substantial inheritance

• A business formation, purchase, or sale

• A major increase in business or real estate value

• The purchase of property in another state

• A move to or from Texas

• A change in charitable goals

• A change in federal or state tax law

• A significant lifetime gift

• A change in trustees, executors, or beneficiaries

Even when none of these events occurs, a regular review can help confirm that ownership, beneficiary designations, trusts, and tax strategies still work together.

Common Estate Tax Planning Mistakes

Assuming a Will Avoids Estate Tax

A will controls the transfer of certain probate assets, but it does not by itself remove property from the taxable estate.

Assuming Married Couples Automatically Receive Two Exemptions

Each spouse has an individual exemption. Preserving a deceased spouse’s unused exemption through portability generally requires a Form 706 filing.

Giving Away Appreciated Property Without Reviewing Basis

A gift that reduces the taxable estate may transfer a low tax basis to the recipient and create a larger capital-gains obligation.

Ignoring Life Insurance

Life insurance proceeds are generally income-tax-free to the recipient, but the policy proceeds may still be included in the insured person’s taxable estate depending on ownership and control.

Failing to Plan for Liquidity

An estate composed primarily of real estate or a closely held business may be valuable but lack the cash needed to pay taxes and expenses.

Creating Trusts Without Properly Funding Them

A signed trust cannot control assets that were never transferred to it or properly coordinated with it.

Treating Tax Planning as Separate From Family Planning

A tax-efficient transfer may still produce an undesirable result if it gives the wrong person control, exposes an inheritance to divorce or creditors, or creates conflict among beneficiaries.

Frequently Asked Questions About Estate Tax Planning in Texas

Will most Texas families owe federal estate tax?

No. Most estates are below the federal estate-tax filing threshold. However, families below the current threshold may still benefit from planning for asset appreciation, capital gains, business succession, portability, trusts, and out-of-state property.

Is the federal estate tax based only on cash?

No. The taxable estate may include real estate, businesses, investments, retirement accounts, insurance proceeds in certain circumstances, and other property valued as of the owner’s death.

Does an estate pay capital gains tax at death?

Death itself does not generally create a capital-gains sale. However, capital-gains tax may apply when an estate, trust, or beneficiary later sells appreciated property. The property’s tax basis can significantly affect the result.

Do I have to pay gift tax when I give more than $19,000?

Not necessarily. A gift above the annual exclusion may require a federal gift-tax return and may reduce the donor’s remaining lifetime exemption without creating immediate gift tax.

Can I give $19,000 to more than one person?

Yes. The annual exclusion applies separately to each recipient. A donor may potentially make qualifying annual exclusion gifts to multiple people during the same year.

Can my spouse and I simply combine our exemptions?

Not automatically. Each spouse has an individual exemption. Married couples may use both exemptions through coordinated planning, and portability may preserve a deceased spouse’s unused amount when the required election is made.

Should an estate file Form 706 when no tax is due?

It may be advisable when portability is important or when other tax elections or reporting considerations apply. The decision should be evaluated soon after the death because filing deadlines apply.

What happens if my wealth is tied up in land or a business?

The assets may still be included in the taxable estate based on their value. A liquidity plan may help prevent the family from having to sell important property under time pressure.

Can a trust eliminate all estate taxes?

No trust automatically eliminates tax. The result depends on the trust terms, funding, retained rights, asset values, tax law, and proper administration.

How often should I update my estate plan?

Review the plan after significant family, financial, business, or legal changes. Even without a major event, a review every few years can identify outdated documents, ownership problems, or missed tax-planning opportunities.

Estate Tax Planning for Dallas and North Texas Families

The Ashmore Law Firm, P.C. assists clients with estate planning, trusts, lifetime gifting, business succession, asset protection, probate, and related tax-planning considerations.

From our Dallas office, we serve families and business owners throughout Dallas, Uptown Dallas, Highland Park, University Park, the Park Cities, East Dallas, Lakewood, Plano, Frisco, Southlake, Fort Worth, Denton, Rockwall, and Dallas, Collin, Denton, Tarrant, Rockwall, Ellis, and Kaufman counties.

Our estate planning team can work with your accountant, financial advisor, insurance professional, business counsel, and other advisors to create a coordinated plan.

This page provides general educational information and is not legal or tax advice. Tax results depend on individual facts and applicable law. Estate tax planning should be coordinated with qualified legal, tax, and financial professionals.