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If you haven’t looked at your estate plan recently, now might be the right time. New federal tax laws are changing the way high-net-worth families think about wealth transfer, and even if your estate isn’t massive, these shifts could still affect how you plan, give, and protect what you’ve built. Here’s what’s new, what it means, and how you can prepare
What’s Changed: 2025 Tax Law Updates
Until recently, the federal estate tax exemption was set to drop sharply in 2026. But thanks to a new federal spending bill passed by Congress in 2025, that drop isn’t happening.
Here’s the current breakdown:
- According to the IRS, the federal estate and gift tax exemption is $13.99 million per person in 2025
- For married couples, the combined exemption is $27.98 million
- Beginning in 2026, the exemption will be permanently fixed at $15 million per person, with annual adjustments for inflation
That means only a small percentage of estates will face a federal tax burden in the years ahead, and many families now have more flexibility in how they approach gifting, asset transfers, and long-term planning.
How This Affects Texas Residents
Texas doesn’t impose an estate or inheritance tax, so all eyes are on federal rules when it comes to planning. These changes are especially relevant for families with:
- Real estate holdings that have appreciated significantly
- Closely held businesses
- Large retirement accounts or investment portfolios
- Life insurance policies held inside the estate
Even if you don’t think your estate is close to the new threshold, don’t assume you’re in the clear. Values can shift over time, especially with inflation, market growth, and property appreciation in cities like El Paso and across West Texas.
What to Know If Your Estate Is Close to the Limit
If your estate is approaching or exceeding $15 million, you now have a bit more breathing room, but that doesn’t mean planning is less important. In fact, it may be more crucial than ever to ensure your documents are up to date.
Strategies that are still worth considering include:
- Annual gifting: You can give up to $19,000 per year per person (or $38,000 per couple) without affecting your lifetime exemption
- Irrevocable trusts: These can help move high-value assets out of your estate and reduce exposure to taxation
- Reviewing asset ownership: Ensuring that assets are titled correctly can help you make the most of available exemptions
In many cases, even those with moderate estates can benefit from exploring these options, especially when multiple generations are involved or unique family considerations are present.
Planning Certainty, Not Just Tax Savings
One of the most significant advantages of the new law is the sense of stability it provides. For years, families and advisors worried about the so-called “sunset” of the current exemption levels. Now, with the $15 million limit set to stay in place (and adjust with inflation), there’s a bit more room to plan without racing against an expiration date.
That said, the law remains in effect until Congress decides otherwise. Political winds shift. That’s why we encourage you to revisit your plan regularly—not just once a decade.
What About Small Estates?
Even if your estate falls well below the exemption amount, you’re not off the hook. Federal law changes affect more than just the wealthiest families.
For example:
- You still need to file the proper documents if your estate earns income after death
- You may want to adjust how certain assets are passed on to avoid probate delays
- You might benefit from restructuring how life insurance or retirement accounts are owned or designated
We also find that many families don’t fully realize the value of their estate until we sit down and walk them through it. Between homes, accounts, business interests, and other personal property, your estate may be larger than you think.
What You Can Do Right Now
If your estate plan is more than a few years old, it’s worth reviewing. Even minor updates can make a big difference. Here’s where we recommend starting:
- Confirm your beneficiaries are up to date across all accounts
- Review your wills and trusts to ensure they reflect your current wishes and family structure
- Consider whether any lifetime gifts make sense under the new tax rules
- Schedule a conversation with an estate planning attorney (that’s us!) to talk through the options
We’ll review your existing documents, discuss your goals, and help you determine whether any changes are needed now or in the future.
Let’s Make Sure Your Plan Reflects Today’s Tax Rules
Tax law changes don’t have to throw your estate plan off course. But they do require you to pay attention. We’ll help you maximize the current exemption levels, keep your plan on track, and prepare for what’s next.
Reach out to The Law Office of Carey Thompson, PC today to review your estate plan with an estate planning lawyer who understands how federal tax changes impact Texas families. Call us today!