Texas law helps families preserve their wealth. There is no state inheritance tax or state estate tax, sometimes called a death tax.
However, the federal government does impose an estate tax when the value of a deceased person’s estate exceeds a statutory threshold. If you will be passing on significant wealth to your heirs and beneficiaries, it is wise to understand Sugar Land estate tax implications and try to plan around them. The seasoned estate planning attorneys at Romano & Sumner have extensive experience optimizing estate plans for legal estate tax minimization or avoidance.
The estate tax applies to estates with a gross value that exceeds a specific value that changes every year. The federal government imposes a 40 percent tax on the value of the estate that exceeds that threshold, often called the lifetime exemption. For the 2025 tax year, the lifetime exemption for an individual’s estate is $13,990,000.
Property that is not subject to probate may still be included when determining an estate’s gross value for estate tax purposes. Although keeping assets out of probate is a goal of many estate plans and a valuable practice, it is not necessarily effective to mitigate estate tax. Larger estates require additional strategies for maximum tax efficiency.
At Romano & Sumner, we work with many individuals and families in Sugar Land whose holdings could incur death tax liability. We take the time to understand your estate planning goals beyond simple tax avoidance and tailor an estate plan to meet your family’s needs.
The total or gross value of an estate is counted for federal estate tax purposes. That includes property held in revocable trusts, life insurance policies the deceased person owned, annuities, real estate, interests in businesses, and other property. According to Title 20 Code of Federal Regulations § 2034, even property held jointly with a spouse could be counted if you contributed to its purchase price.
The IRS allows certain deductions from the estate’s gross value before estate tax liability is determined. Debts, mortgages, and estate administration expenses can be deducted, as well as certain property that passes to a surviving spouse or registered charity.
Valuing an estate for estate tax purposes is a complex process. Administering a large estate in Sugar Land could mean federal estate tax liability, so you should engage an attorney to assist in the preparation of your estate tax return.
Estate tax planning should be an integral part of your Sugar Land estate plan if your holdings might mean inheritance tax liability. Our attorneys can advise you on ways to maximize the portion of your wealth that your heirs and beneficiaries receive and minimize or avoid estate taxes.
Gifting during your lifetime could be an effective strategy. In 2025, you can give up to $19,000 per year to individuals without implicating gift taxes. Charitable giving also reduces the value of your estate.
Buying life insurance policies and putting them in an irrevocable life insurance trust or transferring current life insurance policies to an irrevocable trust can remove the value of the policies from your estate. Property in other forms of irrevocable trusts can also be excluded from the estate’s value.
If you have a large estate or are the administrator of an estate that might exceed the lifetime exemption value, contact us at Romano & Summer. We have decades of experience helping people navigate Sugar Land estate tax implications. Call us today to plan your effective estate tax strategy.
Romano & Sumner, PLLC
