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Will living out of state increase the taxes on a Texas estate?

Trying to manage a Texas estate from another state is a difficult task. You may require professional support in Texas just to make remote estate administration feasible. From securing property to learning about state laws, you may have a lot of work in your immediate future.

Your permanent address will likely play a major role in how you handle different assets from the estate. For example, selling real estate may seem like a far more practical approach than trying to retain the property.

One common concern among those trying to handle an estate from outside of Texas is that their location will have an effect on the estate taxes that apply. Does your out-of-state address increase the taxes on the estate? 

The basics of Texas estate tax rules

The state where someone lived and owned property will be the state where their surviving family members must probate their estate. You know the laws where you live aren’t the ones that will govern the estate for your parents. Texas probate law is what will matter the most.

The good news is that Texas does not currently assess either an estate tax on the assets that your loved one left behind or an inheritance tax on the assets that a beneficiary receives. You will not have to worry about state estate taxes diminishing your inheritance. Although there are a number of states that do assessment inheritance tax, that tax applies to estates probated within those states.

However, it’s important to realize that if the testator left behind substantial assets, like a ranch or a small business, that the estate could still be subject to federal estate taxes. The assets in the estate will need to be worth more than $11.7 million to trigger the federal estate tax.

Are there other tax issues you will need to handle?

Estate taxation isn’t the only concern for someone handling a Texas estate. There are also income taxes for the deceased individual to consider, as well as income tax filings for the estate itself if you have to sell assets and generate more than $600 in revenue by doing so.

Connecting with the right information and support will make probating a Texas estate from elsewhere an easier process for you.