Estate Planning in Houston: the rules, the tax, and the next step
Estate Planning here is a energy problem shaped by employer deferred-comp and energy-sector 401(k)s in a no-income-tax state, where the expensive errors are federal IRMAA and Texas Medicaid look-back — not state income tax — not a national brochure.
Estate planning is who is in charge while you are alive, and who is paid when you are not
A will is public and goes through probate. A funded revocable living trust can keep the inventory private and out of probate. Beneficiary designations on IRAs and life insurance override the will. An outdated designation is how an ex-spouse inherits despite a newer will.
The trust only controls what it owns. An IRA is usually not “poured into” a revocable trust during life; it needs a beneficiary who can empty under the SECURE Act 10-year rule. Titling and designations are the work. The leather binder is the souvenir.
The local stack this page is actually about
Energy-sector deferred compensation and Texas Medical Center 403b accounts bunch federal income even though Texas levies none. A bonus year plus a conversion plus a pension start is the IRMAA pattern two years later. Texas homestead under Constitution Article XVI Section 50 is not IRA protection and is not a brokerage shield. Texas Medicaid look-back still applies to gifts funded by an energy payout. Product traffic around the energy corridor makes a written job-for-the-contract more useful than a teaser rate. Checkable names on this page: Texas Medicaid, TX LIC. 2357269. For estate planning, start from energy and Texas Medical Center healthcare — employer deferred-comp and energy-sector 401(k)s in a no-income-tax state, where the expensive errors are federal IRMAA and Texas Medicaid look-back — not state income tax — rather than a national template.
Industry mix and the planning load
ExxonMobil, Chevron, and other energy deferred-comp units; Texas Medical Center 403b plans at MD Anderson, Methodist, and Memorial Hermann; and offshore or plant-shutdown bonuses set the mix. A turnaround-year bonus plus a conversion is the classic overshoot. Homestead folklore does not cover a brokerage account in Harris County. energy and Texas Medical Center healthcare are the two pay-and-savings stacks we actually see. Population context: about 2.3 million residents (U.S. Census Bureau, ACS 2023 5-year estimates). The constraint we plan around is employer deferred-comp and energy-sector 401(k)s in a no-income-tax state, where the expensive errors are federal IRMAA and Texas Medicaid look-back — not state income tax. Competition among advisors is high; that does not create a storefront and it does not change the statutes.
Beneficiaries on energy retirement accounts
Workplace plans from energy keep old beneficiary forms after the will is updated. Employer deferred-comp and energy-sector 401(k)s in a no-income-tax state, where the expensive errors are federal IRMAA and Texas Medicaid look-back — not state income tax The plan document wins. Community-property states add a spouse’s interest that a form can still get wrong. Advisor and product density is high, so the scarce thing is a written recommendation that survives a second set of eyes — not another seminar.
Funding a trust when wealth is in Texas Medical Center healthcare
Houses and taxable accounts tied to Texas Medical Center healthcare only avoid probate if the trust is funded. Texas has no state estate tax or inheritance tax. A revocable trust does not, by itself, reduce federal estate tax. After a move, community-property versus common-law rules can make the old packet obsolete.
What is different in Houston
ZIP codes 77002, 77084 is in the service area. Estate Planning work here is usually about employer deferred-comp and energy-sector 401(k)s in a no-income-tax state, where the expensive errors are federal IRMAA and Texas Medicaid look-back — not state income tax — not a generic “retirement tips” article. Plan conversions against the federal bracket and IRMAA cliffs; treat Texas homestead and Medicaid rules as a separate, documented workstream. Advisor density is high, so the scarce thing is a written recommendation that survives a second set of eyes.
How Texas changes the numbers
Texas does not tax conversion income or IRA withdrawals.
Documents that have to match the accounts
Will, revocable trust, financial power of attorney, healthcare directive, and a beneficiary review are the core.
When “we should get around to it” becomes a court file
A hospital admission without a power of attorney is how families end up in a conservatorship.
The will that does not control the IRA
People update the will and leave a 2009 401(k) beneficiary form untouched.
Care, Medicaid, and the long stay
Texas Medicaid long-term-care eligibility uses a five-year look-back.
How we actually work with you
Reduced Risk is a licensed service-area practice (TX LIC. 2357269). We work with Houston households by phone and secure video. There is no Houston branch office — and we will not invent one in schema or on the page.