As we're halfway through 2025, several significant changes to Texas estate planning law have taken effect that could impact your family's planning strategy. Whether you have an existing estate plan or are just getting started, these updates deserve your attention.
1. Expanded Digital Asset Protection
Texas has strengthened its Revised Uniform Fiduciary Access to Digital Assets Act (RUFADAA). As of January 2025, the law now explicitly covers:
- Cryptocurrency and digital wallet access
- Social media business accounts with monetary value
- NFTs and other digital collectibles
- Cloud-based business files and subscription services
What this means: Your executor can now access these digital assets more easily, but only if you've properly documented them in your estate plan. The new law requires specific language in wills and trusts to be effective.
2. Homestead Exemption Increases
Texas homestead exemptions have been adjusted for inflation. For 2025:
- Urban homesteads: Protected up to 10 acres (unchanged)
- Rural homesteads: Protected up to 200 acres (unchanged)
- Homestead value protection: Now unlimited for debt protection
- New addition: Primary residence must be occupied at least 6 months per year to qualify
The new occupancy requirement affects snowbirds and those with multiple residences. Planning around this change is crucial for asset protection strategies.
3. Special Needs Trust Modernization
Texas has adopted the updated ABLE Act provisions, expanding opportunities for individuals with disabilities:
- ABLE account contribution limits increased to $18,000 for 2025
- New "ABLE to Work" provisions allow additional contributions for working beneficiaries
- Improved coordination between ABLE accounts and special needs trusts
- Enhanced portability between states
4. Probate Court Efficiency Improvements
The Texas Legislature streamlined several probate procedures this year:
- Small Estate Affidavits: Now available for estates up to $75,000 (increased from $50,000)
- Electronic Filing: All Texas probate courts now accept electronic filings
- Simplified Inventory: Detailed appraisals no longer required for certain assets under $25,000
- Expedited Independent Administration: New 30-day notice period for uncontested cases
5. Trust Decanting Rules Clarified
Texas courts have issued important guidance on trust modifications:
- Trustees now have clearer authority to "decant" (modify) irrevocable trusts
- New safe harbors for tax-neutral trust modifications
- Expanded options for addressing changed circumstances
- Improved protection for trustees making good-faith modifications
"The law isn't static—it evolves with society's needs. What worked for your family's estate plan five years ago might need updates to remain effective and take advantage of new opportunities."
6. Business Succession Planning Updates
New provisions affect family business transfers:
- Enhanced valuation discounts: Family limited partnerships receive stronger protection
- Succession timeline flexibility: Extended deadlines for certain family business elections
- Buy-sell agreement updates: New requirements for valuation methods in agreements
7. Medicaid Planning Adjustments
Texas Medicaid rules have been refined for 2025:
- Asset limits remain at $2,000 for individuals, $3,000 for couples
- New exemptions for certain annuity types
- Clarified rules for caregiver child transfers
- Streamlined application process for crisis planning
Tax Implications for 2025
While these are federal changes, they significantly impact Texas estate planning:
- Federal estate tax exemption: $13.99 million per person (adjusted for inflation)
- Annual gift tax exclusion: $18,000 per recipient
- Generation-skipping tax exemption: $13.99 million
- Reminder: These exemptions sunset in 2026 unless Congress acts
What You Should Do Now
If you haven't reviewed your estate plan in the last two years, these changes provide compelling reasons to do so:
- Digital Asset Audit: Document all digital assets and update your estate plan language
- Homestead Review: Ensure your primary residence designation meets new requirements
- Trust Evaluation: Consider whether existing trusts could benefit from new modification options
- Business Planning: Update buy-sell agreements and succession plans
- Tax Planning: Plan for potential exemption sunset in 2026
Don't Wait for the Next Change
Estate planning law continues to evolve, often in response to technological advances and societal changes. The key is having a plan flexible enough to adapt and an attorney who stays current with these developments.
These 2025 changes present both opportunities and potential pitfalls. Whether you're protecting a young family, planning for special needs, or considering business succession, staying current with Texas law ensures your plan works when your family needs it most.
Remember: estate planning isn't a "set it and forget it" exercise. Regular reviews ensure your plan evolves with your life and the law.