Untitled Texas Attorney General Opinion ( 1953 )

Ron. Robert S. Calvert Comptroller of Public Accounts Capitol Station Austin, Texas Opinion No. S-62 Re: Exemption from inheritance tax of bequest to such corpo- ration, association or trust fund as trustees may select for certain charitable pm.- Dear Sir: poses. We quote the following excerpt from your letter re- questing the opinion of this office on the above-captioned subject. *We desire the opinion of your office with respect to the correct exemption applicable to a bequest made under Clause XI asamended by Clause SMTH of the codicil to the last will and testament of Godcheaux A. C. Halff. deceased, of Bexar County, Texas. ‘Clause XI of the will as amended by Clause SDCTH of the codicil devises three-eighths (3/8) of the residue to the decedent’s brother and nephew. or thesurvivor. as Trustees for public charitable uses and purposes--one-half (l/2) to the National Jewish Hos ital at Denver, Colorado, and the other one-half (1 P2) of three-eighths (3/8) ‘to such cor- poration, association or trust fund as his Trustees may select for any one or more or all of the follow- ing charitable purposes for the relief of the poor. to wit: Hospitalizationi the promotion of health; the relief of the afflicted and other medical aid; the re- lief of poverty; the advancement of education; gov- ernmental or municipal purposes.’ -The surviving trustee, Hugh A. L. Halff, ne- phew of the decedent, has made and filed with this department an inherftance tax report for the Estate of Godcheaux A. C. Halff. and under Schedule E thereof has reported the one-half (l/Z) of three- eighths (3/8) of the residue devised to the National . &Ion. Robert S. Calvert. page 2 (S-62) 2% and a tax due thereon in the amount of $203,968.57. The other one-half (l/Z) of three-eighths (3/8) of the residue the Trustee is claiming exenp t as pro- vided in Article 7122. ‘In view of the holding in the Presbyterian Case (198 S.W.Zd 282) we ask you to advise this de- partment whether the one-half (l/2) of three-eighths (3/8) of th e residue devised to the Trustees for se- lected charitable purposes by the Trustee’s is exempt or taxable as provided in Article 7122.” The pertinent provisions of Article 71224lass E, V.C.S., are the following: “Foreign bequest. If passing to or for the use of the United States, to or for the use of pny other person or reIigious. educational or charitable organ- ization . . . the tax shall be . . . provided, however, that this Article shall not,apply on property passing to or for the use of the United States or any religious, educational or charitable organieation when such be- quest, devise or gfft is to be used within this State;* c In the Presbyterian Church case, .the decedent be- queathed one-half of her ,estate to the Presbyterian Church in the United States. No limitation as to ‘use. of the property w.ithin the State of Texas was expressed fn the,wfll. The Presbyterian Church operates in many states and in foreign lands. The proper Church ,... authorities. sfter the decedent’s death, obligated the Church to use the bequest in its entirety in thenState of Texas. The Court held that the “manifest purpose of the statute is to exempt a devise or bequest passing sunder a will from the payment of the tax imposed onfy when such devise or bequest.is to be used in this State. The Court also said at page 285: *Nor .is the fact that the.partfes have stipulated that the appellant Church has. promised and will use the property fn Texas material to a proper coaetruc- tion of the statute. The Legislature has provided no form or ‘method by whfch, the taxing authorities might ascertain whether a larger or lesser use may be made of the property by the devisee or legatee in order to secure or create an exemption from the payment of the tax imposed by the statute.” The facts presented by your,request are clearly . Hon. Robert S. Calvert, page 3 (S-62) governed by the Presbyterian case. Mr. Halff’s will contained no language limiting the trustees in their selection of a charitable cor- poration, association or trust fund to Texas charitable enterprises. Thus the property passed upon Mr. Halff’s death without restriction as to where it will be used. It is therefore not within the overall exemption provided in Class E but is taxable thereunder. SUMMARY Property passing by will to certain trustees to be given to such charitable corporation, associa- tion or trust fund as said trustees may select is subject to an inheritance tax under Article 7122. V.C.S., since no limitation as to use of the property within the State of Texas was expressed in the will. Presbyterian Church in the U. S; v. Sheppard, 198 .S,W.Zd 282 (Tex. Civ. App, 1946, error ref. n.r.e.). Yours very truly, JOHN BEN SHEPPERD Attorney General :j .. .’ ‘Marietta McGrego# Creel Assistant APPROVED: W. V. Geppert Taxation Division C. K. Richards Reviewer .: BurnelI Waldrep ; Executive Assistant .:: 5:;. John Ben Shepperd ;:i~ . Attorney General