01/08/2026
Important Wealth Transfer Protections Passed in November Election.
On November 4, 2025, two important wealth transfer protections were passed in Texas. These two protections were effectuated through amendments to the State of Texas Constitution
The first was a constitutional amendment called Proposition 2 that permanently bans capital gains tax on individuals, families, estates, or trusts. The ban prohibits tax on both realized gains and unrealized gains. The State of Texas did not have a capital gains tax before this amendment was passed, but the State wanted to ensure that future legislatures were not able to impose the tax. Texas is only one of eight states that do not impose a capital gains tax.
The second also amended the Texas State Constitution to prohibit estate tax. The voters of the State of Texas passed Proposition 8 that prohibits legislature from imposing a “death tax.” The amendment ensured that there is permanent ban on taxes on a decedent’s property, the transfer of estate, inheritance, legacy, succession, or gifts. Although Texas did not have an estate tax, this amendment strengthens the State’s ability to protect business owners and family but ensuring that no future tax may be imposed by the legislature.
The State of Texas has taken leaps to guarantee wealth transfer to its citizens, however, the federal estate tax will still apply.
