January 24, 1961 

Honorable Robert S. Calvert Opinion No. w’d-988 

Comptroller of Public Accounts 

Capitol Station Re: Necessity of obtaining 

Austin, Texas inheritance tax waivers 

on transfers of shares 

of corporate stock in 

the name of a deceased 

shareholder to his 

Dear Hr. Calvert: executor. 

You have requested that we advise you on the above 

captioned matter. The pertinent statutory provisions are 

Articles 14.22 and 14.23, Ch. 14, Title 122A, Taxation-General, 

V.A.T.S. Article 14.22 reads as follows: 

"No notes, bonds, certificates, mortgages, 

stocks, securities or other evidences of 

indebtedness due the estate of deceased 

persons and subject to taxation, hereunder, 

shall be transferred or delivered to any 

legatee or heir until the Comptroller issues 

a notice to the executor, administrator 

or trustee of such estate, or to their 

bondsmen, stating that all the inheritance 

taxes due this State have been paid. Such 

notice shall be authority for any administrator, executor or trustee to deliver such 

property to the proper legatee or heirs." 

Article 14.23 reads as follows: 

"Should any domestic corporation or 

association transfer to any legatee or heir, 

or should an administrator, executor or 

trustee deliver to any legatee or heir, the 

stocks or bonds of any domestic corporation 

or association, or deliver any other property, 

before the inheritance tax thereon due this 

state is paid, the corporation or association, 

or the administrator, executor, trustee and 

their bondsmen, shall be liable for said tax 

and penalty and all cost of collection." 
Honorable Robert S. Calvert, Page 2 Opinion No. W-988 

You will note that the prohibited transfers enumerated 

in Article 14.22 are transfers or deliveries “to any legatee 

or heir. . .‘I The notice of payment of inheritance taxes 

required by this article is notice to any administrator, 

executor or trustee and constitutes the authority for the 

delivery of property in their hands to the proper legatee 

or heir. 

The penalties imposed by Article 14.23 are incurred only 

when ;he prohibited transfers are made “to any legatee or heir 

. . . 

We are of the opinion that the lan guage of these controlling 

statutory provisions is plain and unambiguous and precludes the 

necessity of obtaining a written consent from the Comptroller 

prior to transfers of corporate shares of stock in the name of 

a deceased shareholder to the executor of his estate. This 

concl 

Y 

sion is fortified by the fact that Articles 14.16 and 

14.19 , Chapter 14, Title 122A, 20A, Taxation-General, V.A. T. S., 

expressly provide that a lien shall exist on all property subject 

to taxation under the inheritance tax statutes and that “said 

tax shall be a lien ;Eon such property from the death of the 

decedent until paid. Stated differently, only payment can 

extinguish the lien for inheritance taxes. 

No. v-769 (1949). 

Op. Atty. Gen. 

Thus the transfer of shares from the name 

of the decedent to the executor in no wise affects the state’s 

security for the inheritance taxes. The lien therefor continues 

as a matter of law, and it is only upon transfer tc t,he legatee 

or heirs that notice of payment of all inheritance t.axes due 

this State must first be received as auf,‘nority fcr such transfers. 

1/ Article 14.19 reads as follows: 

“A lien shall exist on all proper%y 

subject to taxation under this law t,o 

secure the payment of all taxes, penalties 

and costs provided for in this Chapter. 

All persons acquiring any portion of said 

property shall be charged with notice of 

the existence of all such unpaid taxes, 

penalties and costs, and of the lien 

securing their payment, which may be 

enforced in any suit brought for the 

collection of said taxes, penalties 

and costs .” 

Article 14.16. 
Honorable Robert S. Calvert, Page 3 Opinion No. w-988 

In Cooper 267 S.W.2d 848 

(Tex.Civ.App., 1954, error ref., n.r .e. ), the court held that 

where a will bequeathed corporate stock to a trustee and 

provided that the stock should be turned over to the trustee 

by the executor as promptly as practicable after the death 

of the testator, and the executor had endorsed stock certificates and delivered them to the corporation with a request for 

transfer to the trustee and issuance of new certificates to 

the trustee, the executor was not entitled to vote the stock 

pending administration even though the corporation had refused 

to record the transfer on its corporate books. 

It was contended in this case that Articles 7136 and 7137, 

R.C.S., (presently recodified in identical terms in Articles 

14.22 and 14.23) necessitated a different result. The court 

summarized the two articles and concluded that they had no 

application to the decision of the case at bar. At page 854, 

the court said: 

“The Bank’s action in endorsing the stock 

to the Trustee Cooper, or a transfer of same 

on the books of The Cooper Company could not 

violate the cited statutes. They provide 

that stocks shall not be transferred to an 

heir or legatee. The statutes’ purpose is 

to protect the State in its collection of 

inheritance taxes. Cooper is a Trustee under 

the will, with only the power to vote the 

stock and pay the dividends to Mrs. Brassell 

and Mrs. Denton, who are the legatees. Endorsement or transfer of the stock to the Trustee 

Cooper by the Executor or the corporation is 

not a transfer to a legatee or heir. 

“The statutes prohibit a Trustee as well 

as an Executor from transTerring stock to 

a legatee or heir prior to the time the 

Comptroller certifies that taxes have been 

paid. The State has the same protection after 

the transfer to the Trustee as it had prior 

thereto .‘I 

Thus the reasoning of the court in the Cooper case is in 

accord with the reasons which have led to our answer to your 

instant request. 

S U M M A R Y 

An inheritance tax waiver need not 

be obtained in order to transfer shares 
Honorable Robert S. Calvert, Page 4 Opinion No, w-988 

of corporate stock in the name of a 

deceased shareholder to his executor. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

BY 

Assistant 

MMP:cm 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

Jerry H. Roberts 

Linward Shivers 

W. 0. Shultz 

W. E. Allen 

REVIEWED FOR THE ATTORNEY GENERAL 

By: Morgan Nesbitt