HonorableRobert S. Calvert

Corn&rollerof Public Accounts Opinion Ro. C-100 Capitol Station Aust In, Texas

Dear Rr. Calvert: Re: Proper classification for inheritancetax purposes of adopted children of an adopted daughter of the decedent.
We quote the followingexcerpt from your letter requesting the opinion of this office on the above captionedmatter:

“We desire the opinion of your office with respect to the proper classification for Inheritancetax purposes of the adopted children of an adopted daughter of a decedent.
“B. 0. Lindsey died testate a resident of Jasper County, Texas, on December 29, 1961, and under his last will and testament he devised the entire estate with the exceptionof some small special bequests, a life estate to his wife, Mrs. Hattie E. Lindsey, and the remainder to Qeorgla Davis and Frederick Davis, the children of an adopted daughter.

’
In this connectionyou have advisedus that the adopted daughter’schildrenwere adopted in 1956. For the purposes of this opinion It is assumed that all three adoptionswere consummatedin accordancewith the adoption statutes then In effect.
If the adopted children of the adopted daughter cannot coqe within the provisionsof Article 14.02 - Class A - , Chapter 14, Title 122A, Tax.-@en.,Vernon’s Civil Statutes, they must be classified under the less favorableprovisionsof Article 14.06 -mClass E -; suma. Article 14.02 reads in part as follows:
"If passing to or for the use of

husband or wife, or any direct lineal descendantof husband or wife, or any

-492-Honorable Robert S. Calvert, Page 2 OpinionNo. C-100

direct lineal descendantor ascendant of the decedent, or to legally adopted child or children,or any direct lineal descendantof adopted child or children of the decedent,or to the husband of a daughter, or the wife of a son, the tax shall be.

. . ."
In view of the decisionsof our courts, it might be possible to accord this favorableclassification to the adopted children of the adopted daughterunder the provisions for “any direct lineal descendantor ascendant of the decedent.’ However, the more readily applicableprovision is that for “any direct lineal descendantof adopted child or children of the decedent.”
In order to qualify for the preferred tax treatment accordedpersons enumeratedin Class A, two contraryarguments must be overcome. The first is that Article 14.02 specifically

distit$guishes

“direct lineal descendants”from “adoptedchiltren. Likewise,although the statute specifically places cedent " in thi .any direct lineal descendant. .of the de-

&me categorywith "legallyadopt;?d child or children”of the decedent, there is no provision for the legally adopted child or children of an adopted child of the decedent;rather the statute specificallylimits its classiflcation to "any direct lineal descendantof adopted child or children of the decedent." Thus, on its face the statute indicatesan intentionto treat an adopted child or children of an adopted child of a decedent differentlyfrom direct lineal descendantsof such adopted child or children of the decedent.
The second obstacle lies in the fact that ordinarilv the class "direct lineal descendants" does not include adopted children. State v. Yturria, 109 Tex. 220, 204 S.W. 315 and Decker v. Williams, 2151 S.W.2d 679 (Tex.Clv.App. 194 A1918),

, error ref.} are two inheritancetax cases which recognize this prlnclpie..
The Court in the Yturria case said that “direct lineal descendant"

meant naturamring. Neverthelessthe Court held that the decedent'slegally adopted children came within the exemptionthen providedby Article 7487, R.S. (1911) for "direct lineal descendants"of the decedent,because under the terms of the adoption statutes,adopted childrenwere entitled to the same rights and privilegesas natural children with respect to that which passed to them upon the death of the adoptiveparent without Issue of his bqdy. The court

-493-HonorableRobert S. Calvert,,Page, 3 Opinion Ho. C-100

pointed out that under the civil law; adopted persons and their childrenwere given the same legal status as natural children and grandchildren but that the applicableTexas adoption statutes specificallylimited the rights and privi- ' leges of~the adopted child. The Court said at page 316:

II

. . .Our statute, however, defines with precision the rights and privileges to which a party shall be entitledby virtue of adoption. These rights and, privilegesare, under article 2, R.S.:
"'All the rights and privileges, both in law and equity of a legal heir of the party so adoptinghim.

. . .I' However, the Court In the Yturria case refused to allow an exemption for the propertywhimed under the will to the children of the adopted children,because "we do not feel warranted in extendingto others the rights and privileges, which are confinedby the adoption statutes to the adoptive person." 204 S.W. at p. 317.
In the Decker case the Court was concernedwith the proper classificationmheritance tax purposes of a legally adopted daughter of the decedent's first wife who had predeceasedhim and with the classification of two children of the first wife's adopted daughter. The~adoption had taken place in 1928. Class A classification

was accorded the adopted child of the decedent's first wife on the ground that the phrase "direct lineal descendant"

must be given the same meaning when applied to "husbandor wife" as when applied to the decedentunder the prior act in the Yturria case. However, the adopted child's childrenwere den-as A classification. It is evident that in both the Yturria case and the Decker case favorable classificationfomitance tax purposeswas predicated upon the rights and privilegesof heirship accordedby the adoption statutes in force at the date of the adoption of the beneficiary.
Another case which predicateda determinationof proper classification

for inheritancetax purposes on the rights of heirship resulting from adoption is Farrler v. Calvert, 315 S.W.2d 40 (Tex.Civ.App.

1958, error ref. n.r.e.). In this case the court held that the adoptivemother of a deceased child, uho had been adoptedby a deed of adoption on February 2, 1925, could not be regarded as a "dir ct lineal ascendantof the decedent" for inheritancetax PF rposes. One of the reasons for the court's decisionwas that under the adoption statutes

-494-HonorableRobert S. Calvert,Page 4 OpinionNo. C-100

in effect at the time the decedentwas adopted no rights of heirshipwere conferredupon the, adoptiveparents. The problem we are presently consideringis the result of the progressiveenlargementof rights of adopted children under the adoption statutes. The pertinentprovisionsof the present adoption statutes,which were In force at the time of the adoption of the beneficiariesin question,read as follows:
"Sec. 9. When a minor child Is

adopted in accordancewith the provisions of this Article, all legal relationship and all rights and duties between such child and Its natural parents shall cease and determine, and such child shall thereafterbe deemed and held to be for every purpose the child of its parent or parents by adoption as fully as though natural1 born to them in lawful wed oc . d.

. . For purposes of inheritance

under the laws of descent and distributionsuch adopted child shall be regarded as the child of the parent or parents by adoption, such adopted child and its descendants Inheritingfrom and through the parent or parents by adoption and their kin the same as if such child were the natural legitimatechild of such parent or parents by adoption,and such parent or parents by adoption and their kin inheritingfrom and through such adopted child the same as if such child were the natural legitimatechild of such parent or parents by adoption.

. . .'I Article 46a, V.C.S.
In this present form, the provision Is significantly different from the one quoted on pages 2 and 3 of this opinion which was considered in the Yturrla and Decker cases. It should be noted that the stanferremhe old statutes "as a legal heir of the party so adoptinghiP1" has beef ckhaged to that of a "naturally born child 'forall purposes. LegislatureIntendedby these changes to broaden the application of the adoption statutesbeyond the restrictionemphasizedin

-495-HonorableRobert S. Calvert, Page 5

the Decker case, adopmild." viz. "as between the adoptingparents and the OpinionNo, C-100

In view of the foregoing,the adopted children in questionhave become, for all purposes of Inheritance,the natural children of the adoptingparents. Since the decisions which we have previously summarized in connectionwith our Inheritancetax statuteshave accorded favorableclasslfication for Inheritancetax purposesbased on the rights of heirahip > we can only conclude that the children in this case should be classified under Class A.

SUMMA R,Y The adopted children of an adopted daughter of a decedent are entitled to Class A classlflcatlon under the provisionsof Article 14.02,V.C.S.
Yours very truly,
WAGGONER CARR Attorney Qeneral of Texas

BY

alLLd&- 'RQordon Appletian AssistantAttorney Generals

APPROVED:
OPINION COMMITTEE: W. V. Geppert, Chairman
J. H. Broadhurst Ernest Fortenberry W. E. Allen J. S. Bracewell
APPROVED FORTHE~ATTORNEXQENERAL By: Stanton Stone
-496-