Untitled Texas Attorney General Opinion ( 1944 )

OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
_. 1
-e Hon. cko. EL 8hagpm.U
Ooaptrollrr of Publlo Aoooiuta
Austin, ~ToxaS
Dow 8irr
horn your roqueat
1944, and the do o umc ntaloo
iollowlng faote on nhloh t
llra. mua xoeblor,
toes 968 shares of
ion t&b. hold by.
ror l p ee06 0t
arm of t&-trust,
(a) 'to'wti suoh atook
~lnolubing tlm x4618; mort-
oht of tha propwty or
:traaster~thr stool. Rona
ti roorui~~ on thr atook ,
r~p.dl by the
named in the in-
ltook,~the trua-
lllvor tha prooeoaa.oi'tba ,aale to tha
rooa5rdaadi with tbolr oimqrihip. Yukon
rust, thq atook shall bo dqlfverrd to,tha
arvrral done air toga1 rrpnrrntatfvra or t0atam8atary
legatara.
The tru0t 4*0u r0oitaa th a l ta0parate owiri00t08
(of atook) have this aaj ken iaaur4 to sale (brwtlai~rlra)
la ths amu,mtS riemd, a@d d0livrrsl... , to aaid Trgateea t0
be held by thorn for the said banatioiarlea in tha amnor sub-
jeot to tha‘rorermtlonr, reatrlotlona and 1lmltatIooa horein-
a+r montion~d.’
._
The trust dewl further rsoltra~ 53 i8 IfitsndeQ
by thie.iaatrwaent and the issuanoo of la ldabaok osrtlfl-
oat68 to &~a an outr ht gift ef Said atoak to Siwh of
Mid Deraona~ but in ?Y ew of the faot that the &onaea to
aoattw36, an5
San AAtoAio --
. aentionad-ieatod In the said Truatwa~ tha
lald #took in trwt to thb #a&l* trUatO88, ulth the powrrs
noted above. ( ismpha4ilaours)
You ad&r tha% 88 t&e kinw oi hu deaf&, 011;
April 26, 19b3, l&a. Koohlu ownad 1202 ahnrea of atmok la
tho San Antoaio Breulng Aaaoolatloa~
You ask rhethw or not this branstar lr *a &fr
to ia o tltQbr bhe death at
o ftso t
take l do no r a nd inolud-
ablo aa a part bf the gross rrtcde an4 auY feat to the tax.*
The rtifmt portion 0r 0~ inhd~itan063 tax
statute (Art, $t 7, v.A.0.8,) la as rolla*
‘All jmparty WithiA the jPri6didtiOA Si thla State,
real ar puaonal, aoqmrato or lnoorpmata, a& any
interest theraln. . . uhioh shall sass absolutalr or ia
The oowta of this State have aonel#baBly held
that the lnherltamoo tax la a tu lapmad upon the rl$hb to
reoatte or WOOei#b $0 the pO88epr&~ o r lnjamnb Of th
prOpUt iAVOlVd. 8taOe v. Fross, 123 %x4 68, 72 3, wr 2a1
5931 It&ma V. Sheppard, lb?‘S. We (2&j 997 bmor mtwrd I .
The right to rmsive tar luooeed to tha poasoesloa
6r caJc+psat of property 18 tqrabla ehaa aaob pssrrr~doa Of
anJopent la rae&vad unilar a tmatrr m&r or latsoded to
taka rffeot aiter tha daath of the donor. The orpurt in Bethaa
I, Sheppard, aupra, as144
-
Hon. 000. El, !3happerd, pagr 3
“It la not a puaatlon of what%tha baneflalal
interoet is oreated, but the tax is la&wed open thr
right to reoolvr in poSaaasloa or onjopent ettor
the death of gmntar or aettlor. In oonae Umoo, a
ntor or lettlor say ueate aa lrrovooab s o tnrst
!r
urlnq his litatFMe
of poaaeaalah or ooJo
attor ~ran$orta dSSth,
~orei~ ,la rubjeat to
at or after his bath,
~poaaraalon* or tmJoym
4~th o f g r a n%oorr l4t
trust ratato, auoh tmm
The oourta of et&or. stat& hwe ~rm-al ‘@old
tranafora lh 6ruaO whirala the umotor or SrtYor % a naoriml
a llfa inooa, to be taxablr tier a ltatuto taxing tranatrra
~adr or inteadod to take wwb ia po*aaaalon or opnent,
at or aitsr the death of the donor er aottlor. 61
9, J. 1663,
23~0, Z&(4) end Saaoa oitm¶. 49 &+ Li 8. 8741 67 A. L. R.
12501 100 A. L. R. 12461 l2l A. L:R. s.’
It $8 filao generally hel& tha3 it the inoom of the
trust property is pyahlo %a tho b+noiioiarp until thq death
of’ the gr*nbsr or aottkor, ab rhloh tifuS t&w raPaind#r of tha
obrpua 1s to pass to tho bettriisiuy, tM tight oi luo o o a a lo n
themto la, as to the remxindu, taxab&o 48 being mm30 or,
intend& to take otisdO ia poaamalos w mJoymnt rttar Thor
death of the danof or Sbttl8rr In re ‘8 saCate 220 Ia. 825,
263 Nb tf. 501; P00pie vm i&Oor4alok,327Ti 1. 5k7 iJIS~N. a, 6611
In ro !t?e:lanQu~a Sat&o, 12) )r, JTI 2% 52, &95~k 805.
la re KfLUaadorfa
Koahlsr trust,
retaimxl abaolutsly SO pcnSz
Sontral, and noitrhsr ha nor hi* 088StS IWQiVb MY-
b;;flte Sroa tho tmut$ar At pa86 807 of 195 Aa, th6 OfWE
“‘Ph. tr85rssr OS the rofMlnde* (arter the ALSO Of
the iionor) does OS oourm oome ulthin the lit6r61 word6
or the ~tstute. Suoh r6&16iAdoriAteZ'66t 06A 6Om6iAt
JtOBS088iOAand 6nj0 Ul6Atby the r6PJ6fAd6~lMAonly at,
Wd AO$ Mbi%, the i 6l'iZi$AatiOAOf th6 prior 11f6 08t6t6
at the a6ath of tho daaor (ar, i@ eonswhat aor. obvious
ia l ame rhus Mm 1lSr tulaab 6~4 thi rwdn4eraw1 are
diii6r6tlb ~@dM). But OA the other haod, both iAt6r6etr
Ue iI!lEOdiah~ ad OOlpplOt6lY8PWlriWr6d l8 4~6 @Adthe
a8160 &xi0 by olr* and the 8am lkutromeat o r lofrof DramS6r.
la S88MO8 ad in ptaOtiM& &f6Ot, th. d4UIOrby that inatru-
mm r edo
a 5dlsr o o twb 4r trara6fot 4r the
t64 l ri~gle gist
rho16 lt@ $ e,h iS of# intereat b the property1 and
OOA8ehily if his OP i38tP3AOAt had ,OOAt6'cb ruoh
whole orteto, 6xprarsoP a6 a AlWe 6~tie &a& of
6g’t”L La the tiW0 pa&r, the tSkn8ibr~wwld not bo
l . . l
(1
l . .
*. . 8.a $NSMt~ *ff@tit~ tHWbf6r by & dOnOr iAt4X'
ViwM, of a 6bpiratsly and speaiiieally 6%pr6sr& MfdAd6r
in86l-O6$, U&Or0+Wh &6d&dU fAtW66t i6
QOltaenOl at a uipi et pr ai06P the death of
ta.x+tbIe under our'6ta$uts) ootwlthrta.mlin(g t&it by the
vu* l6 m lot or. iitatruamk OS tnnri6x th6 donor rlmul-
taiwou8lp tran8froe all tihsr intereotain th6 a6w property
and thereby eampl@tely an4 prrsentlp divestk himerlf ar
all i&OX088 Qlrpoaaibility of interest iA th6 property
a6 a *~l.e, . . .*
“. . l
"ThO tert of tamblllty is AOt Oh6 tims of tho 0016.
lot6 biV.rrOting OtthO trUUtWWt8 intU.St 8r 6WA6r6htp)
Pt ir t&o th# Qt the tiap~.rte woeeasioa b tha traAa-
Sue*. ?&or0 them 16 a trclAAi= ot a 6p66 E la lat6rrest
iA prop& aA th0 8~068~sO~ Of thQ trPnriO~0~ d608 AOt
boooms, ani under Oh6 t6mao of the tinaafer i8 mot Co
beooim, 6OSp16t6 w&l1 6 tirw ab OF titer the d6ath Of
the tmmafsror, that twn6t6r 16 taxAbler *'Ph. 4lrtiAotlon
* * + rasta on * * * whether bh6 donso is d6p@i+ed Of aA
lnterost or AOlnO kia4 * + * Until th6 dOAOl"6 death ‘-
IA re XOAO~J~ rupra, 98 N. J. ZQFLI 638, a8 paw 643,
129 A* 393, 395, Cf ., also, In r6 lImAford, maprae
‘In th6 IaataAb 0666 the trSAsi6ror, in order
to rmks a oo6i~lots glib oi ths 65tlm property ts his
Wife, did AOt h6V6 80 SO&NWatS iti lot-4 M OSt6t6 &ring
his own llts acd a T6n6lndl6r rtter ai8 death. Obviously
84 in the fMtrW6nt Pnd6X’ OOn8~d9rSt~Oit; Wrs.
KO6hl6r M@b ths &ft Of 6hCtWO iAt6PSS66 b6$%l'StO~yiOr
her MA bWSfi& hen aiter~ths transfea?, &j&simacd r’sub-
r?ientf4l +&6r of shares oi etos& iA,ttur BFooring Asso6ia81on -
a0 srlQsms4 By th6~Saat that tit, her death ohs CJWA6d1202
shuesr 8hho~wa8On6 of bbOSl, Oth6S stookhsZdsPu ior who86
‘b6St illtST68tS* @A6 d66md it UfS6 t0 hen6 the VPtiil&&Of
the NrsanSsmd 8ho& rested ie tha tW'&66S, Whlcth voting
rights faaluded tb pawerr to ml1 lith uthe r 8Oook 4s all
OS th6 SssSt6 o$ @ho 80x' l'S8ti44,to &W%&6&S OF SASUEiber the
ropSrty.of,thS Sorporajgoon. 11Ilaug a9 i&e. Koehl6r should
flvr puar8 OtCaz bar death, the bwteffolsrier
$ t0 Do am.8 thaA bbbe iAt%Oloo Of Ohs bPU6t ?4p6rty.
tibe dwth or tb doaor, md Lie lapse of i Pfd
rears lfkr.heP. death, to v&M lithe beAsifei8ri68 my 00~0
trol, any rig&t of psesession or aajoya~t OS the prinolpal
or oatpus OS $ho trim 68tSt8~ b th6 oortrt Sal& in Beth66 vlr
Shejv;ur(L,8QYT4, SE "x& t8 DdfS4t thab the d&t
OS ~88888f0U 4&a 'e fnWm, 18 AOt QOSS~SSiOA Or
~Joynw~t OS $hS QQFQW of k&e tt6St~6statS whloh
produe tlto lr.imB.~
a Orsasisr *ma46
amsat after
the ddafh of Us grantor Sz A4mrIg eat to the tax.
We arO rebirnhg herswith t&6 file whioh ao6oap6sied
your opfsif4B regllssI.
.r