WILL WILSON 

A’PIORNEYOENERAL 

‘%USTXN 11. TEXAS 

December 13, 1962 

Honorable Robert S. Calvert 

Comptroller of Public Accounts 

Capitol Station 

Austin, Texas 

Opinion No. WW-1497 

Re: Exemption from 

tance tax of a 

and bequest to __.. _- . 

inheridevise 

the . Natlonal r'ounaation 

for Infantile ParalyDear Mr. Calvert: sis, Inc. 

In Attorney General's Opinion No. NW-1349 the exemption 

from Inheritance tax of this same devise and bequest was denied. 

The controlling provisions of the decedent's will are paragraphs IX, X and XI which read as follows: 

"In the event I shall survive my 

wife, then I hereby give, devise and 

bequeath unto my Trustees hereinabove 

named all my property, both real, personal or mixed, of which I may die 

seized and possessed, IN TRUST NEYERTHELESS to hold, manage, control, sell 

and convey the asme In accordance with 

the authority hereinafter conferred 

upon them. 

"The beneficiaries of this trust 

shall be The American Cancer Society, 

Texas Division, a non-profit corporation, incorporated under the laws of 

the State of Texas and the National 

Foundation for Infantile Paralysis, 

Inc., a corporation organized under 

the Membership Corporations Law of 

the State of New York, having its 

principal office at 120 Broadway, 

New York, New York. My estate and 

the income, rents and revenues therefrom, Including the proceeds of the 

same, shall be used by said corporations for the purposes and uses herelnafter set out. 

"The term of,thls trust shall be 

for a period not to exceed five years 

from and after the date of my death. . . 
. i 

Honorable Robert S. Calvert, Page 2 Opinion No. WW-1497 

c 

"During the pendency of this trust, 

after the payment of all expenses 

thereof, there shall be paid by my 

Trustees one-half of the income, rents 

and revenues from the property of my 

estate to The American Cancer Society, 

Texas Division, with its office at 

Houston, Texas, and one-half of the 

income, rents and revenues from the 

property of my estate shall be paid 

to the National Foundation for Infantile Paralysis, Inc., a New York 

corporation. Prior to the termination 

of this trust, I direct that my Trustees 

shall sell all of the property of my 

estate and shall deliver one-half of 

the proceeds of the same, together 

with one-half of the net income therefrom after the payment of all expenses 

of administering this trust, to each 

of the beneficiaries, to be made at 

the discretion and in the amounts as 

may be determined by the Trustees. 

"The American Cancer Society, Texas 

Division, shall use all of the funds 

received by it from my Trustees for 

research in the methods of treatment, 

diagnosis and prevention of cancer, 

and to aid in the care of indlgent 

cancer patients in securing adequate 

diagnosis and treatment, and any 

other activities which may contribute 

to the control of cancer in such manner as may be directed by said corporation; provided however, that all 

of the funds which may be received 

by The American Cancer Society shall 

be used by it and expended for any 

and all of said purposes within the 

State of Texas. 

"The National Foundation for Infantile Paralysis, Inc., shall use such 

funds as may be received by it for the 

purposes for which it is incorporated." 

Article 14.06, Ch. 14, Tit. 122A, 20-A, Tax.-Gen., 

Vernon's Annotated Texas Statutes, contains the provisions 

requisite to exemption from inheritance tax. 

portions of Article 14.06 are the following: 

The pertinent 
Honorable Robert S. Calvert, Page 3 Opinion No. WW-1497 

"If passing to or for the use 

of. . .rellglous, educational or 

charitable organization or institution,. . .the tax shall be: 

11 

. . . 

"Provided, however, that this 

Article shall not apply on property 

passing to or for the use of. . . 

any religious, educational or charltable organization Incorporated, 

unincorporated or in the form of a 

trust, when such bequest, devise or 

gift is to be used within this State. 

"The exemption from tax under the 

preceding provisions of this Article 

shall, without limiting Its appllcation under other appropriate clrcumstances, apply to all or so much of 

any ,bequest, devise or gift to or 

for the use of. . .a religious, educational or charitable organization, 

which is, In writing and prior to 

the payment of the tax, Irrevocably 

committed for use exclusively within 

the State of Texas or transferred to 

a religious, educational or charitable 

organization for use exclusively wlthin this State, 

"Provided, further, that if the 

property so passing is to or for the 

use of a religious, educational, or 

charitable organization which conducts 

its operations on a regional basis, 

one such region of which includes the 

State of Texas, or any part thereof, 

then a bequest, devise or gift to be 

used within such region shall be deemed 

to be used within this state. 

"For purposes of this paragraph a 

region shall comprise not more than 

five contiguous states, either in 

whole or in part, one of which is 

the State of Texas." 

"For purposes of this paragraph, 

a religious, educational, or charitable 
Honorable Robert S. Calvert, Page 4 Opinion No. WW-14%' 

organization shall include, but 

not be limited to, a youth program 

of physical fitness, character development, and citizenship training 

or like program." 

At the time Opinion No. WW-1349 was written, the attorneys representing the estate took the position that the fact 

that the beneficiary was a charitable corporation was sufficient to effectuate exemption, This office rejected this 

view and denied exemption since the requisite geographical 

limitations as to use had not been met. 

Subsequent to the rendition of Opinion No. WW-1349, 

the National Foundation elected to commit the funds involved 

for use in a region of five contiguous states composed of 

Texas, Arkansas, Louisiana, Missouri and Oklahoma. As evidence of this commitment, we have been furnished with a 

letter addressed to the attorneys representing the estate 

from John J. O'Connor stating that he is enclosing a letter 

from Mr. Joseph F. Nee, Senior Vice-President of the National 

Foundation "irrevocably committing all moneys passing to it 

under the Last Will and~Testament of the. . .decedent for use 

exclusively within Region 5 of its organizational structure, 

which Region includes the five contiguous States of Texas, 

Arkansas, Louisiana, Missouri and Oklahoma." Attached to 

the letter is a duly certified copy of a resolution of the 

Board of Trustees of the National Foundation authorizing the 

officers thereof to make a commitment of this nature. The 

National Foundation is a corporation duly organized and 

existing under the laws of the State of New York. The resolution was unanimously adopted by the Board of Trustees of the 

corporation at a meeting duly called and held on May 14, 1959. 

The resolution is still in full force and effect. In substance it authorizes the President or Vice-President, together 

with the Secretary or Treasurer or an Assistant Secretary or 

an Assistant Treasurer of the National Foundation to accept, 

assign, exchange, or consent to a reduction in, or modification of, any share in, or payment, from any estate or other 

fund if consistent with the purposes of the National Foundation, and to agree in their discretion to performance of the 

National Foundation, or any of its chapters, of any condition 

or restriction lawfully imposed upon the use of any bequest 

or devise, and to execute and deliver any consent which the 

said officers may deem necessary or desirable for the accomplishment of any of the powers described in the resolution, 

and In addition to all powers specifically described in the 

resolution to do any of the acts which the National Foundation 

can do through its officers with respect to the estate of a 

decedent in which the National Foundation or any of its chapters has an interest. 
Honorable Robert S. Calvert, Page 5 Opinion No. WW-1497 

We quote the following excerpt from a letter signed 

by Joseph F. Nee, Senior Vice-President of the National Foundation: 

"In order to avail itself of the 

exemption from the payment of these 

Inheritance taxes in the aforementioned amount provided by Article 

14.06 of the Vernon's Texas Civil 

Statutes, The National Foundation 

hereby irrevocably commits all the 

monies received by It as a beneficiary named In the last Will and 

Testament of the subject decedent 

for use exclusively within Region 

V of its organizational structure, 

which Region includes the five contiguous States of Texas, Arkansas, 

Louisiana, Missouri and Oklahoma." 

We will first consider whether the proposed commitment 

is consistent with the Intention of the decedent as expressed 

In the provisions creating the testamentary trust. It is 

true that the decedent saw fit to limit the expenditure of 

the trust funds bequeathed to the American Cancer Society to 

use within this State. However, no such limitation, in fact 

no geographical limitation of any kind, was placed upon the 

National Foundation except as such geographical limitations 

might be Imposed by its charter. The law is settled that 

a will may be construed only In cases in which there Is ambiguity. In those cases in which Intention of the testator 

is clearly and unequivocally expressed, there is no room for 

construing a will. 44 Tex.Jur. 677, Wills, Sec. 131. The 

National Foundation receives the Income from this trust free 

of any restrlctlon save that previously referred to and could, 

consistently with this provision of the will, commit the 

expenditure of the funds as they have attempted to do in 

this case. Further, In this connection, It Is noteworthy 

that at the termination of the trust, which may exist for a 

period of not to exceed five years, the National Poundation 

will receive its share of the trust corpus and will have full 

and absolute ownership thereof. We therefore conclude that 

the attempted commitment is not contrary to the expressed 

intention of the decedent, and therefore is not in contravention 

of the terms of the testamentary trust. 

We pass now to a consideration of the question of 

whether the commitment, as submitted, meets the requirement 

of the statute, and is:sufficient to effectuate exemption. 
Honorable Robert S. Calvert, Page 6 Opinion No. WW-1497 

We first call your attention to a matter which could, of course, 

be easily corrected. The letter committing the fund to use 

within Region V of the organization of the National Foundation 

is signed only by the Senior Vice-President.. Under the terms 

of the resolution pursuant to which the Vice-President is 

authorized to make such a commitment, he must be joined with 

the Secretary or the Treasurer, or,an Assistant Secretary or 

the Assistant Treasurer, of the National Foundation. 

No facts have been submitted to us as to the manner 

in which the National Foundation conducts its regional operations in general nor its specific operations in Region V. 

However, this office on two different occasions has construed 

the meaning of "regional basis" as that term is used in the 

statute. We quote the following excerpt from Opinion No. 

ww-1146 : 

(1 . . .It is clear to us, that for 

a charitable organization to conduct 

its operations on a 'regional basls3, 

as that term is used in the ,statute, 

that the entire field of its operations would have to be divided into 

separate and distinct regions and be 

of a permanent nature, with each region being subject to local management and control, under proper dlrectlves from the officers or directors 

of the charitable organization." 

Opinion No. WW-1141 held that it was not essential 

that a charitable organization be oper,ating on a regional 

basis at the date of the decedent's death nor that there be 

more than one reglon in order to be entitled to exemption 

if such regional operation is effectuated prior to the payment of the tax. The opinion discusses the history of the 

enlargement of the charitable exemption, but states that the 

statute necessarily contemplates that the State of Texas 

receive some benefit before exemption will be allowed. 

We quote the following excerpt from page 9 of the 

opinion: 

1, .Since we have no fixed legislative'standard to use as a guide, we 

are of the opinion that each particular 

case must rest upon its own facts, and 

that if the facts show that this State 

will receive substantial benefit as a 

result of the regional operations of 

the charitable organization, exemption 

should be accorded." 
- . 

Honorable Robert S. Calvert, Page 7 Opinion No. WW-1497 

If, therefore, facts are submitted to you which 

cate (1) that there will be an operation on a "regional 

in Region V and (2) that Texas will receive substantial 

fit from such operatlon, exemption from inheritance tax 

be accorded. 

SUMMARY 

The National Foundation for Infantile 

Paralysis, Inc. may, consistently with the 

provisions of a testamentary trust of which 

it Is a beneficiary, commit the funds it 

receives therefrom for use within, Region V 

of its organizational structure, which Region Includes the five'contiguous States of 

Texas, Arkansas, Louisiana, Missouri and 

Oklahoma. If facts are submitted to you 

which indicate (1) that there will be an 

operation on a "regional basis" In Region 

V and (2) that Texas will receive substantial benefit from such operation, 

exemption from Inheritance tax should be 

accorded. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

indibasis" 

beneshould 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Iola Wilcox 

John Reeves 

Robert Rowland 

Bob Shannon 

REVIEWED FOR THE ATTORNEY GENERAL 

By: Leonard Passmore