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Title Tag: Moving to Texas? Community Property & Estate Planning for New Residents (2026) - ProbatePedia

Meta Description: Texas has no estate tax, no inheritance tax, and no state income tax. But Texas is a community property state — and moving from a common law state changes how marital assets are treated, creates a double step-up in basis opportunity, and requires specific action to protect your estate plan. Here's the complete guide.

Moving to Texas? Community Property & Estate Planning for New Residents (2026)

Last Updated: March 2026 • Texas Estates Code, Tex. Fam. Code• Interstate Move Series — Article 5 of 5

| ContentDetailContentImpact for New Resident** | | --- | --- | --- | | No Texas Estate Tax | TX has no state estate tax — abolished decades ago. | If you moved from IL ($4M exemption; 16%), NY (~$7.28M; 16%), MA ($2M; 16%), MN ($3M; 16%): old state estate tax liability eliminated by TX domicile. TX domicile saves up to $1M+ in state estate tax for large estates moving from OR or NY. | | No Texas Inheritance Tax | TX has no inheritance tax. | PA residents: your children currently owe 4.5% PA inheritance tax on every dollar inherited. Move to TX: $0. NJ siblings: up to 16% Class C. Move to TX: $0. | | No Texas State Income Tax | TX has no personal income tax — retirement income, Social Security, investment income all untaxed at state level. | Significant ongoing income tax savings for retirees moving from CA (up to 13.3%), NY (up to 10.9%), MA (5%), or IL (4.95%) | | Double Step-Up in Basis | Community property: at the first spouse's death, BOTH halves of all community property step up to fair market value (IRC §1014(b)(6)) — including the surviving spouse's half. This is not available in common law states. | Example: married couple moved to TX, executes CP Agreement converting pre-move assets to community property. $1M portfolio originally purchased for $200K: step-up at first death eliminates $800K of capital gain — saving $120,000–$190,000 in federal capital gains tax. Both halves step up, not just the decedent's half. | | Texas TODD (Transfer on Death Deed) | Tex. Estates Code Ch. 114 (enacted 2015): TX allows TODD for real property — including separate property AND community property homes. | TX homeowners can pass real property at death without probate using a TODD; also available for community property homes with proper drafting | | Strong Homestead Protection | TX Constitution Art. XVI §50: TX homestead exempt from forced sale by most creditors; unlimited value in rural areas; 10 acres for urban homesteads. | TX homestead protection is second only to FL in strength; protects family home from most creditors (except mortgage, property tax, mechanic's liens) |

Community Property in Texas — What New Residents Must Understand

| ContentWhat It Means for a New TX ResidentContentAction Required** | | --- | --- | --- | | What is community property? | Property acquired by either spouse DURING marriage while domiciled in TX is automatically community property — owned 50/50 by both spouses regardless of whose paycheck bought it. Each spouse has an undivided ½ interest in all community property. | Understand that your paycheck, savings, and investments accumulated after moving to TX become community property; your old separate property retains its separate character unless converted | | Pre-move assets — separate property | Property you owned BEFORE moving to TX (and before marriage) remains SEPARATE property in TX — your individual property, not community property. Separate property does NOT automatically become CP just because you moved to TX. | No automatic conversion; if you want old assets to be CP (to get double step-up), you must execute a Partition and Exchange Agreement or Community Property Agreement — see below | | The double step-up opportunity | If you convert pre-move separate property to community property using a TX Partition and Exchange Agreement, BOTH halves of the converted assets get a full step-up in basis at the first spouse's death — eliminating all capital gains tax on the appreciation. | Consult CPA: if pre-move assets have significant unrealized gains, converting to CP may save substantial capital gains tax. But conversion is irreversible for the converted assets — get professional advice first | | Community Property Survivorship Agreement (CPSA) | Under Tex. Est. Code §112.051: spouses can execute a CPSA designating specific community property assets to pass to the surviving spouse automatically at death — with no probate. This is Texas's version of JTWROS for CP assets. | For married TX couples: CPSA is a powerful, low-cost probate-avoidance tool for community property; probate is avoided AND double step-up in basis is preserved; requires written agreement signed by both spouses | | Your will and community property | A will drafted in a common law state may not correctly account for community property. A bequest of 'all my property' may be interpreted to include your spouse's ½ community property interest — an unintended result. TX law allows each spouse to dispose of their ½ of community property by will. | Update will in TX with community property-aware language; consult TX estate planning attorney |

The TX Community Property Agreement vs. TODD vs. Revocable Trust

| ContentWhat It CoversContentProbate Avoided?ContentDouble Step-Up?ContentBest For** | | --- | --- | --- | --- | --- | | CPSA (Community Property Survivorship Agreement) | Specific community property assets covered by the agreement | Yes — CP assets pass to survivor automatically; no probate for covered assets | Yes — CP character preserved; double step-up at first death (IRC §1014(b)(6)) | Married TX couples; simple situation; low cost; want probate avoidance + double step-up for CP assets | | TX Transfer on Death Deed (TODD) | Real property only (Tex. Est. Code Ch. 114) | Yes — property transfers automatically at death without probate | Separate property: only decedent's ½ steps up. CP property TODD: double step-up if CP character maintained — ⚠ verify TX TODD + CP interaction | TX homeowners wanting simple probate avoidance for real property; can be used alongside CPSA | | Revocable Living Trust | All assets — real property, accounts, investments, business interests | Yes — for all funded trust assets | Trust must explicitly identify and preserve CP character to maintain double step-up; poorly drafted trust may inadvertently convert CP to separate property | Anyone with incapacity concern; significant separate property or out-of-state property; married couples with combined estate over $15M federal threshold; blended families | | Community Property Agreement (Partition/Exchange) | Converts separate property to community property — for double step-up planning | Does not avoid probate on its own; use with CPSA, TODD, or trust | Yes — after conversion, assets become CP and get double step-up at first death | Couples who moved from common law states with large appreciated pre-move separate property portfolios; use with CPA analysis |

Texas Estate Planning Checklist for New Residents

✅ Establish TX Domicile — Within 30 Days

• Obtain Texas driver's license; surrender old state license
• Register to vote in TX county of residence
• Re-register vehicle(s) in Texas
• File change of address with USPS and IRS (Form 8822)
• Open primary checking account in Texas
• If moving from NY or CA: begin location log documenting days in TX vs. old state

✅ Update Estate Plan in Texas — Within 90 Days

• Execute new Texas Will: confirm executor qualifications (TX generally permits non-resident executors; verify current TX rule); address community vs. separate property; self-proving affidavit recommended
• Review and update revocable trust: update governing law to TX; review AB Trust provisions (TX has no estate tax — mandatory AB Trust split likely unnecessary for state tax reasons); update trustee powers
• Execute TX Healthcare Directive (Tex. Health & Safety Code Ch. 166) and TX Medical Power of Attorney
• Execute TX Statutory Durable Power of Attorney (Tex. Est. Code Ch. 752)
• File TX TODD on new TX home if not deeding to trust
• Apply for TX Homestead Exemption with county Appraisal District (Form 50-114) for property tax benefit

✅ Community Property Planning — Within 90 Days (Consult CPA + Attorney)

• Identify all pre-move separate property assets with significant unrealized capital gains
• Consult CPA: analyze whether converting pre-move assets to community property via TX Partition and Exchange Agreement is beneficial for double step-up in basis
• If conversion is beneficial: execute TX Partition and Exchange Agreement with attorney; update account titles to reflect CP character
• Execute Community Property Survivorship Agreement (CPSA) under Tex. Est. Code §112.051 for designated CP assets to pass to survivor without probate
• Confirm revocable trust explicitly identifies and preserves CP character of community property assets
• Update beneficiary designations on retirement accounts (IRAs, 401k) — keep in individual name; update beneficiaries

✅ Verified Data — March 2026

• TX: no estate tax, no inheritance tax, no state income tax — confirmed

• TX community property: Tex. Fam. Code Ch. 3 — confirmed

• TX TODD: Tex. Estates Code Ch. 114; enacted 2015 — confirmed

• TX homestead protection: TX Const. Art. XVI §50 — confirmed

• CPSA: Tex. Est. Code §112.051 — confirmed

• Double step-up in basis: IRC §1014(b)(6) — both halves of CP step up at first death — confirmed

• TX Statutory Durable POA: Tex. Est. Code Ch. 752 — confirmed

• TX Healthcare Directive: Tex. Health & Safety Code Ch. 166 — confirmed

• TX Homestead Exemption: Form 50-114 with county Appraisal District — confirmed

• TX executor non-residency rule: ⚠ editor verify current Tex. Est. Code §304.003

Interstate Move Estate Planning Series:

IM-1 → Is Your Will Still Valid After Moving States?

IM-2 → Transfer Your Living Trust When You Move States: Complete Guide

IM-3 → Changing Domicile to Avoid State Estate Tax: What You Must Do

IM-4 → Moving to Florida? Estate Planning Checklist for New Residents

IM-5 → Moving to Texas? Community Property & Estate Planning for New Residents

probatepedia.com · /texas/estate-planning-new-residents/ · IM-5 of 5 · v1.0 March 2026