. . 

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 ROI Bxistonce ana release of lnherltanoo 

tax lien w&r ‘submitted facto. 

Dear Sir8 

You have requested the opinion of the Attor-' 

,ney General as to questions raised by &.. Jack W. Frost, 

Independent Executor of the Estate of tied W. Frost, 

deceased. The Saets Sormi 

7 

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. 

We quote 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 San Antonio. . . . 

“Mr. HaFt died on July 8, 1938, teatate;,: 

. . . 

. 

“His will gives ~a11 hla property of 

whatever kind an8 oharaoter to his daughter 

Katharine Hart Edson, and appolnte ho* IIIdepentinti BxecutrZxm: 

” 

. . . 

&art 

“The invent0 ‘3 in 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 

anti a 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 San in tonlo to Fred 

W. Frost, among whioh te en undivided onehalf interest in a part of Lots ~4 and 5 in 

said new’city Block 401 

aorlbed In said Deed. 

particularly de- 

$he Deed reoltes 

‘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. . . . My files indioate that 

the interest on this note was delinquent 

and that the former note to which referenoe 

is made in the inventory was probably made 

for delinquent Interest. The conveyance was 

obviously made in oanoellatlon of one of 

the items of indebtedness as listed in the 

inventory ltnd list of olaims. 

,I 

. . . 

“I have maae the Inheritanoe Tax Returnsin the Estate of Fred W. Frost and 

have paid the full amount of the fnheritanoe tax due, . , . The unaivided one-half 

aterest in the lots mentioned above wa8 

Listed in the inventory and in the Inherit- 

¬) Tax Return. 
.%A. Robert 8. Calvert, Page 3 ,(V-769) 

"I have sold this undivided one-half 

interest to Mr, Terre11 Bartlett, . '. . and 

his attorney has made a requirement that 

the appsrent inheritance tax lien against 

the Estate of L. J. Hart, deceased, be released. 

Mr. Frost then states that he Is OS the 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 OS inheritance taxes and reads aa 

"A llen~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 Waoh unpald,texee, 

penalties and Qosts, and of the lien Becuring their payment, whioh may be enforced In’any suit brought for the oollsg-, 

tion of said taxes, penalt$.ep &Ad oosts. 

Article 7l31, V. 0. s., presorIbes.the method 

o? Slxlng the tax, provides that notiae of the determination of the amount of the tax shall be given to the 

executor, administrator or ~truetee, and %o the person 

to whom or Sor whosa uee’the property paeses, and Sur- 

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

property from thq 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: 

,~ i 
Ron. Robert S. Cal.vert, PRge 4 (V-769) 

a Sortlori some benefloial 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 WRShiAgtoA hae held that 

the state’s lien for payment OS lnherltano,e taxe8 wa# 

not lost on realty sold by an eXeOUtOr to pay tku e+ 

pensRes OS administration and'ala 

IA e Kearreas~s Estate, 61 Pao. 

a against the brtatr. 

26) 998. Thm Wamhlng~ 

ton statute la similar In maxg reepeots 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 flrom the 

death of the decedent until paid. 

The Washington etatute had be A oonstrued (as has our 

rtatute, State v* Hou& eupra 9 as being a tU 

Eight a? suooessl.on rather than en estate tax, 

orbin's Estate, 107 Wash, 424, 181 Pao. 910; 

was contentlea that since the tex was only upon property pass1 

Y! 

to benefioiaries, the lien of the tax w&s 

likewise imlted. The oourt ~8.8 of the’ opinion that 

this oonoluslon was prealuaed by the reasbnl 

?I 

iA In 

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, was based on the 

power of the Legislature to declare, for purposes of 

the tax, what shall be deemed to have been reoeived by 

those ruooeedlng to the property, and to require the 

l oooessor to pay a tax on that part whioh was never recelved but was devoted to other uses. The oourt said: 

"liow if the Legislature may require, 

am a oondltiOn to the Bucaesslon, that 

the beneficiaries .pay a tax on that por- 
Ron. Robert S. Calvert, Page 5 (V-769) 

tion of the estate which does not pass 

but is consumed by 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 

when ascertained shal$ be a lien on the 

whole of the estate. 

.~ 

The oourYthen wadded that there.was n0 question 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 we have a 

similar predicate end the reasoning of the Supreme 

Court of Washington is applicable here. The Leglslature having required 8s a condition to succession that 

the tsx may have 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. We are 

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 OF in 

trust by vill, or by the Iaws of descent and distribution . . . iir by deed, grant, sale or gift made or intended-'to take ef,feot in possession and,,enjoyment after 

the death of the grantor or donor . . . 

Whenever property is-transferred by shy of 

these enumerated methods the tax 18 imposed even though a 
&a. Robert S. CalveePt, Page 6 (V-769) 

the property is oth&wise dispoeed of a8 Vhbre Bdolktested will is probated b virtue of oompraniee wemat, Crew v. M&q 162 %.W (26) 117 Wx’oz’ rMU8ed 

antI even vhere the hevise wai made put&ant to a oan-' 

reot with the deoedenk, Chenuard v. De8mond, 169 R.V. 

26) 788. 

The property here involved paI98ed by 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, and you 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 and persisted despite aonve 

t 

anoe by OSeputor to satisfy claim8 agef.m the errtate. 

Only payment can extinguish the lien, sn8 

$E gCg:troller has no authority to release 

v. 0. s.' 

Articles 7117, 7131, 7133, 

998. 

In Re Kennedy's Estate, 61 P. 

,..’ :, 

MCrm&ibh 

Yours very truly, 

A!rTOrn~ c#mRRAL OF TIYIAS 

APPROVH)