We Treat Your Investments

Like Royalty

The assets you hold are already subject to taxation. Income that you make through work, royalties and investments, as well as rental or ranching income, is all subject to taxation when you first earn it. If you reinvest those earnings, you will then also pay taxes on your investment earnings eventually.

Given that you have already paid taxes at least once on the resources that comprise your personal wealth, you may feel like it is a reasonable expectation to pass your legacy onto your loved ones without additional taxation. For some people, that assumption leads to issues for their heirs when they die.

Is there an estate tax for people in Texas?

While the state of Texas does not impose an estate tax or death tax on residents, those with large business enterprises, ranch property or massive holdings that reflect a lifetime of successful investing may be subject to federal taxation when they try to pass their wealth onto others.

If you have a legacy you want to leave behind for the people you love, planning now could protect them from paying up to 40% of what they could inherit to the federal government in taxes.

The more you have to leave behind, the more taxes you have to pay

The federal estate tax only applies to estates that have a total value of at least $11,580,000, depending on when the testator dies. Any amount the property above that exempt amount is subject to taxation, and the greater the difference between the total estate value and the estate tax threshold, the greater the tax applied to the overall estate.

In other words, the estate tax is a progressive tax that penalizes those with larger estates more than those with an estate just barely over the threshold. The maximum tax rate is as much as 40%, although many estates pay lower rates, often in the teens.

People with large estates can plan to minimize their taxes

If you already know that what you leave behind for the people you love will exceed the threshold for federal taxes, you can plan ahead to protect your loved ones from losing out on resources you want them to have.

A thorough estate plan for someone with significant resources should include tax planning or wealth preservation planning in order to maximize the long-term benefit of a lifetime of saving and earning.