. .



### EATJI-BRNEY 

### GENERAL OF TEXAS

PRICE DANIEL ATTORNEY

GENERAL AUSTIN 11. .rJcuAs February 12, 1949.
Hon. Robert 2. Calvert Opinion Ho. V-769. Co troller of Public Acoounts has $ in, Texas ROIBxistonce ana release of lnherltanoo tax 

### lien w&r ‘submitted 

### facto. Dear Sir8 You have requested the opinion of the 

### Attor-' ,neyGeneral as to questions raised by &.. Jack W.Frost, Independent Executor of the Estate of tied W.Frost, deceased. The Saets Sormi7 the basis of the &CIOU-~~ torte questions are stated n his letter whloh you have attached to your request together with a oopy of 

### a Warranty Deed from the Estate of L. J. Hart, deoeased, to Frecl W.Frost; said Warranty Deed Is dated February 10, 1939 and signed by Katherine Hart Edson, Independent Executrix of the Dstate of L. J. Dart.

Wequote from Mr. Jack W.Frost’s letter: “Prior to his death, L. J. liert~ouned a part of Lots Nos. 4 and 3 in Blook Ilo. 1, new City Blook 401, within the 

### oorporate limits of the City of SanAntonio.

. . . 

### “Mr.HaFtdied onJuly 

### 8, 1938,teatate;,:

. . . .

“His will gives ~a11hla property of whatever kind an8 oharaoter to his daughter 

### Katharine Hart Edson, and appolnte ho* IIIdepentinti BxecutrZxm: ”

. . . &art 

# “The invent0 ‘3in t+e Estate of L. J. was,filed on uly 3, ,193P.

. . . Amon6,.. Hon. Robert S. Calvert, Page 2 

### (V-769)

i

.

‘C

, others, it lists the property in question at a value of $7,000.00; and the total value of all property is listed as $625,241.35. fi’hhe list of claims filed, a part of the inventory, lists two notes to Fred W.Frost, one for $21,205.54 and one for $4,170.90.

“Subsequently,

. . . the County Judge

. entered his order whfch was approved iy’the State Comptroller, fixing the inherltanoe tax on thie Estate. This order

. . shows an appraised market value of $32,- 999.20, a statutory exemption of $25,000.00 antia net 

### taxable value of $7,999.20. The tsx Slxed Is $79.99.

. . . It Will be aeeumed,that it has not been 

### paid.

“Under’date of February 10, 1959, Katherine Rart Edson conve ed oertain properties IA the City of Sanintonlo to Fred W. Frost, amongwhioh te en undivided onehalf interest in a part of Lots ~4and

### 5 in said new’city Block 401 aorlbed In said Deed. particularly de- $he Deedreoltes

‘Ten Dollars and other valuable oonslderation’ paid by Fred W.Frost andthe aanoellation and delivery to said E&ate by Fred W.Frost of a note for $16,000.00, exeouted by L. J. Rart.

. . . Myfiles indioate that the interest on this note was delinquent and that the former note to which referenoe is madein the inventory was probably made 

### for delinquent Interest. The conveyance was obviously madein oanoellatlon of one of the items of indebtedness as listed in the inventory 

## ltndlist of olaims. ,I

. . .

“I have maae the Inheritanoe TaxReturnsin the Estate of Fred W.Frost and have paid the full amountof the fnheritanoe tax due,

. , . The unaivided one-half aterest in the lots mentioned above wa8 Listed in the inventory and in the Inherit- ¬)

### TaxReturn..%A. Robert 8. Calvert, Page 3,(V-769)

"I have sold this undivided one-half interest to Mr, Terre11 Bartlett,

. '.

. and his attorney has madea requirement that the appsrent inheritance tax lien against the Estate of L. J. Hart, deceased, be released.
Mr. Frost then states that he Is OSthe opin- ~lon 'that the Executor of the L. J. Hart Estate has the right to transfer and convey this property in settlement of debts of the Estate and that, therefore, any

### apparent lien should be released by the Comptroller. IS this were not so, no Estate, regardless of siee, whio$ had more debts than cash on hand, ooul'd ever be sold.

Article 7133, V. 0. S., provides for a lien‘ ,,pl;gti the payment OSinheritance taxes andreads 

### aa

"Allen~shall. exist on all property subjeat to taxation under tNs law to se- &me the payment of all taxes, penalties and costs provided for in this chapter. All persons acquiring any portlon of said property shall be oharged 'with notiae of the existeiioe of all Waohunpald,texee, penalties and Qosts, and of the lien Becuring their payment, whioh maybe enforced In’any suit brought for the oollsg-, tion of said taxes, penalt$.ep &Adoosts. Article 7l31, V. 0. s., presorIbes.the method o? Slxlng the tax, provides that notiae of the determination of the amountof the tax shall be given to the executor, administrator or ~truetee, and%othe person to whomor Sor whosa uee’the property paeses, andSur-

‘,thee* provides that said tax ehall be a lien USIA sy3h property 

### fromthq death of the deoedent until paid.

AI-Mole 7l34, v. 0. 9 sure of said lien."';, ., provides 

### for SoreoloInhelritanoe taxes beinS “privilege taxes” levied upon the 

### rlghh of suoosssion to propert decedent, State ‘0. 

### et.123 T. 568,72!f. (2d ;;S: ,~ iRon. Robert S. Cal.vert, PRge4 (V-769)

a Sortlori somebenefloial interest of the deoedent must be sucoeeded to before any tax can aoorue. lfevertheleslr, the lien provided by Article 7133 Is not epeclfloally limited to the property which is eventually

The Supreme.Court of WRShiAgtoAhaeheld that the state’s lien for payment OSlnherltano,e taxe8 

### wa# not lost on realty sold by an **eXeOUtOr** to pay tku e+ pensResOSadministration and'ala IA e Kearreas~s Estate, 61 Pao. a against the brtatr. 26) 998. ThmWamhlng~ ton statute la similar In maxgreepeots to our statute, poviaing in part ae sollow8r

"All 

### property

. . . whloh ahall pas8 by will

. . . shall be subjeot to a tax am provided

. . . after payment of all debts ;u&y the deoedent at the time of hla

The inh6wltanoe tax ahall be and reiain’a lien on suah estate flromthe death of the decedent until paid. The Washington etatute had be Aoonstrued (as has our rtatute, State v* Hou& eupra

### 9as being 

### a tU Eight a? suooessl.on rather than en estate tax, orbin's Estate, 107Wash, 424, 181 Pao. 910; was contentlea that since the tex was only upon property pass1Y! to benefioiaries, the lien of the tax w&s likewise imlted. The oourt ~8.8of the’ opinion that this oonoluslon was prealuaed by the reasbnl ?I iAIn

d’s Estate, 122 Wash; 648, 211 P. 7 4, wgoh

estate tti was not a aeauotlble expense beoause the statute did not speaiflcally make it so. This result, said the court, wasbased on the power of the Legislature to declare, for purposes of the tax, what shall be deemedto have been reoeived by those ruooeedlng to the property, and to require the loooessor to pay a tax on that part whioh was never recelved but was devoted to other uses. The oourt said:

"liowif the Legislature mayrequire, ama oondltiOn to the Bucaesslon, that the beneficiaries .paya tax on that por-Ron. Robert S. Calvert, Page 5 (V-769)

tion of the estate which does not pass but is consumedby chargeable expense, it may, upon the same consideration, provide that; notwithstanding the allowance of certain deductible expenses in the oomputation of the tex, the amount of the taX whenascertained shal$ be a lien on the whole of the estate. .~ The oourYthen waddedthat there.was n0question in view

., of the plain language of the **8tdXte** above quoted that the Legislature had declared the lien to eXi8t upon the whole of the eatate.

In Walker v. Mann, 143 S.W. (26) 152, error refueed. the Court of Civil Ampeals for the Third Supreme J6dicial District of Te&s held that the amount paid **a8** Federal Estate taxes vaa not an authorized deduatlon in determining the amount of inheritance taxes due under our statute. Thus in this etate wehave a similar predicate end the reasoning of the Supreme Court of Washington is applicable here. TheLeglslature having required **8s** a condition to succession that the tsxmayhave to be paid on a portion of property never received, the question is whether, upon the same ,oonsideration, it **hR.8** seen fit t0 seoure the receipt of this'amount by a lien upon such property. Weare of the opinion that it has done so.

Artiole 7133 provides that the lien ehall exIrt 'gn all property subject to tex&tl.on under this I.&w

The property subject to taxation "under the law" is; iy the terms of Article 7117, V. C. S., "All property within the jurisdlotion 

### of ***hi8** State

. . . and any intereat thereln"including property paaeing under a general power of appointment exeroised by thCdecedent by will, including the prooeeds of life ti8UranCe to the extent, eta.,

. . . which shall pa88 abeolutely OFin trust by vill, or by the Iaws of descent and distribu**tion**

. . . **iir** by deed, grant, sale or gift madeor intended-'to take ef,feot in possession and,,enjoyment 

### after the death of the grantor or donor

. . .

Whenever property is-transferred by shy of 

### theseenumerated methods the tax **18** imposed even though a

### &a. RobertS.CalveePt, Page 

### 6 (V-769)

the property is oth&wise dispoeed of a8 **Vhbre**

### Bdolktested will is probated b virtue of oompraniee we

### mat, Crew v.M&q 162%.W (26)117 Wx’oz’ rMU8ed antI evenvherethehevisewai madeput&ant to a oan-' reot with the deoedenk, Chenuard v. De8mond, 

### 169R.V. 26)788.The property here involved paI98edby tthr

### till of 

### L.J. Hart to his daughter, was eubjeot to tan um&aF the‘~plain terms of Artiole 7117, and therefore tba lien l ttaohed thqeto. Artiole 7131 deolaree that &la liena al&all exist from the death of the deoedent until pa& This being the mandate of the statute, only payment aan 

### l %tingui8h the lien, andyou are without authority to iaeue the release sought.

The State's lien to seoure payment Of iiiherltauce taxes attached to the property pas8ing by will at the aeath of the testator andpersisted despite aonve

### t anoe by OS

### eputorto satisfy claim8 

### agef.m theerrtate. Only payment can extinguish the lien, sn8 $E gCg:troller has no authority to 

### release

v.0.s.' Articles 7117, 7131, 7133, 

### 998. In ReKennedy's Estate, 

### 61P.

,..’ :, MCrm&ibh Yours very truly, A!rTOrn~ c#mRRAL

OFTIYIAS

APPROVH)