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 nameof adeceased shareholder to his Dear Hr. Calvert: executor. Youhave requested that weadvise you on the above captioned matter. Thepertinent 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:

"Nonotes, 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 anotice 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 anadministrator, 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 andpenalty and all cost of collection."Honorable Robert S. Calvert, Page 2 Opinion No. 

### W-988

Youwill note that the prohibited transfers enumerated in Article 14.22 are transfers or deliveries “to any legatee or heir.

. .‘I Thenotice 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. Thepenalties imposed byArticle 14.23 are incurred only when ;he prohibited transfers are made “to any legatee or heir

. . .Weare of the opinion that the language of these controlling statutory provisions is plain andunambiguous andprecludes the necessity of obtaining awritten consent from the Comptroller prior to transfers of corporate shares of stock in the nameof adeceased shareholder to the executor of his estate. This concl Ysion 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 alien shall exist on all property subject to taxation under the inheritance tax statutes and that “said tax shall be alien ;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 nowise affects the state’s security for the inheritance taxes. The lien therefor continues as amatter of law, and it is only upon transfer tc t,helegatee 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:

“Alien 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 anyportion of said property shall be charged with notice of the existence of all such unpaid taxes, penalties and costs, andof the lien securing their payment, which maybe 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 267S.W.2d 

### 848 (Tex.Civ.App., 1954, error ref., n.r .e. ), the court held that where awill bequeathed corporate stock to atrustee 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, andthe executor had endorsed stock certificates and delivered themto the corporation with arequest for transfer to the trustee and issuance of newcertificates to the trustee, the executor was not entitled to vote the stock pending administration even though the corporation hadrefused 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 adifferent result. The court summarized the two articles and concluded that they hadno 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 atransfer of same on the books of The Cooper Companycould 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 aTrustee under the will, with only the power to vote the stock andpay the dividends to Mrs. Brassell andMrs. Denton, whoare the legatees. Endorsement or transfer of the stock to the Trustee Cooper by the Executor or the corporation is not atransfer to alegatee or heir.

“The statutes prohibit aTrustee as well as anExecutor from transTerring stock to alegatee or heir prior to the time the Comptroller certifies that taxes have been paid. The State has the sameprotection after the transfer to the Trustee as it hadprior 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. SUMMARY

Aninheritance tax waiver need not be obtained in order to transfer sharesHonorable Robert S. Calvert, Page 4 Opinion No, 

### w-988

of corporate stock in the nameof a deceased shareholder to his executor. Yours very truly, WILLWILSON Attorney General of Texas

BY Assistant MMP:cm APPROVED: OPINIONCOMMITTEE: W.V. Geppert, Chairman Jerry H. Roberts Linward Shivers W.0. Shultz W.E. Allen REVIEWED

FORTHEATTORNEY GENERAL By: Morgan Nesbitt