Your Estate Is in All 3 States.
Your Plan Should Be Too.

In 2026, the federal estate tax exemption is estimated to revert to approximately $7 million per person (or $14 million for married couples), down from $13.61 million per person in 2025. This reduction is caused by the automatic expiration of the Tax Cuts and Jobs Act (TCJA) on December 31, 2025. The TCJA had doubled the pre-2018 exemption, and without Congressional action, the exemption drops by nearly 50% on January 1, 2026. Families and business owners who were safely under the old $13.61 million threshold may find themselves suddenly exposed to federal estate taxes on assets they expected to pass tax-free. Gifting strategies executed before year-end 2025 can lock in the higher exemption permanently under current Treasury rules.

No, Texas does not have a state estate tax. Texas repealed its state inheritance and estate tax in 2015, and there is no current proposal to reinstate it. Texas estates are subject only to the federal estate tax, which applies above the federal exemption threshold (~$7 million per person estimated in 2026). Texas also has no state income tax, making it one of the most favorable states for wealth accumulation and transfer. Additionally, Texas agricultural land appraised under the 1-d-1 productivity appraisal can be valued significantly below market value, potentially reducing an estate's taxable value further and keeping the total estate under the federal threshold.

No, California does not currently have a state estate or inheritance tax. However, California presents unique estate planning challenges: its community property laws affect how assets are titled and transferred, it aggressively asserts domicile claims over residents who leave the state (meaning CA income tax obligations can follow you), and prior-year gifts may trigger clawback risks if not properly structured. California residents with assets in multiple states need a coordinated plan specifically because of California's 13.3% top income tax rate — the highest in the nation — and the intersection of community property rules with out-of-state trust structures. Proper domicile transfer and entity re-titling are essential when leaving California.

A Nevada Dynasty Trust is a long-term irrevocable trust established under Nevada law that can hold assets for up to 365 years, allowing wealth to be transferred across multiple generations while minimizing estate and gift taxes at each generational transfer. Nevada's dynasty trust statute is among the most favorable in the United States: Nevada has no state income tax, no state estate tax, and its directed trust laws allow the separation of investment management and distribution decisions into different trustee roles. High-net-worth families use Nevada Dynasty Trusts to remove appreciating assets from the taxable estate now, while preserving the assets and their future growth for heirs across generations without triggering estate taxes at each transfer. They are commonly used by multi-state families anchored in Texas with California ties.

An Irrevocable Life Insurance Trust (ILIT) is a trust specifically designed to own a life insurance policy and keep the death benefit out of the insured's taxable estate. Without an ILIT, the death benefit of a life insurance policy is included in the insured's gross estate — meaning a $3 million policy could cost the estate $1.2 million in estate taxes at the 40% top rate. By placing the policy inside an ILIT, the death benefit passes directly to trust beneficiaries completely free of estate tax. The ILIT also creates liquidity: the trustee can use death benefit proceeds to purchase assets from the estate or make loans to the estate, allowing heirs to pay estate taxes without being forced to sell a ranch, business, or real estate at a distressed price. Kyle works alongside estate attorneys to design and fund ILITs in TX, CA, NV, MT, UT, NM.

The TCJA sunset on December 31, 2025 creates compounded risk for multi-state families and business owners. First, the federal estate tax exemption drops from approximately $13.61 million to $7 million per person — meaning families that were safely exempt are suddenly in the taxable zone. Second, for families with assets in high-tax states like California, the combination of reduced federal exemptions and California's aggressive income tax rules for departing residents creates a tighter planning window. Third, any gifts made before December 31, 2025 lock in the higher $13.61 million exemption under current Treasury regulations, even if the exemption later drops — making 2025 a critical year for large wealth transfers, family limited partnership formations, and trust funding decisions that should not be deferred.

The annual gift tax exclusion allows any person to give up to $18,000 per recipient per year (2024 amount, indexed for inflation) completely free of gift tax and without using any lifetime exemption. A married couple can combine their exclusions to give $36,000 per recipient per year with zero tax cost or exemption usage. For a family with multiple heirs, this can transfer $100,000–$200,000 or more annually out of the taxable estate. Beyond the annual exclusion, direct payments for tuition and medical expenses are also fully excluded. More importantly, taxable gifts made before December 31, 2025 using the higher TCJA lifetime exemption ($13.61 million) will not be subject to clawback if the exemption drops in 2026 — meaning gifts made in 2025 permanently lock in the tax benefit at the higher threshold, a planning window that closes at midnight December 31, 2025.

Under Texas Tax Code Section 1-d-1 (also called open-space or ag exemption), agricultural land is appraised at its productivity value rather than its market value for property tax purposes. Productivity value is based on what the land can earn from agricultural use — often $100–$500 per acre for cattle grazing land — compared to market values that may range from $2,000 to $10,000 per acre or more in many Texas counties. For estate planning, the lower appraised value reduces the assessed value of land reported in the estate, potentially keeping the total estate below the federal exemption threshold. A 1,000-acre ranch with a $3,500 market value per acre ($3.5M) appraised at $200/acre ($200K) effectively removes $3.3M from the estate's taxable footprint. Combined with proper entity structuring (such as a Family Limited Partnership) and no Texas state estate tax, Texas ranch land can be among the most estate-tax-efficient major assets in the country.