Estate Planning in Texas vs. Illinois: One Family, Two Very Different Rulebooks

This post compares Texas and Illinois law; figures and deadlines are stated generally, so confirm the current rule in the relevant state before acting.

I have been licensed in Illinois since 1996 and in Texas since 1997. I lived in Illinois from 1995 to 2017, Illinois was the center of my practice through 2018, and I still serve clients in the Chicago area from my Austin office. That two-state practice means I regularly meet families who moved from one state to the other, or who own property in both, and discover that the estate planning rulebooks differ far more than they expected. I make these comparisons often in my published Justia answers; here are the differences that matter most.

Start with death taxes. Texas has no state estate or inheritance tax. Illinois has its own estate tax, with an exclusion of roughly four million dollars as of this writing, well below the federal exemption and, unlike the federal exemption, not portable between spouses. That single difference means many Illinois couples need trust planning that a comparable Texas couple can skip entirely, and it means a move between the states can change the right plan overnight, in either direction.

The property systems differ at the root. Texas is a community property state; Illinois is not. That affects who owns what during a marriage, what each spouse’s will can actually control, and how income tax basis works at death. The deed tools differ too: both states offer a transfer-on-death deed (Texas’s Transfer on Death Deed and Illinois’s Transfer on Death Instrument), but the requirements are not identical, and the Lady Bird deed so common in Texas planning is not an Illinois practice. Homestead protection is another gulf: Texas homestead protection is famously broad, while Illinois’s exemption is modest by comparison, which changes the asset protection conversation entirely.

The takeaway is simple: an estate plan drafted for one state should be reviewed when you move to the other or buy property there, because documents and strategies that work beautifully in Austin can misfire in Chicago, and vice versa. Because I practice in both states, I can tell you what travels, what does not, and what needs to be redone.

If you have moved between Texas and Illinois, or own property in both, have your plan reviewed by someone licensed in both states. Call or text 512.761.8479.