OFFICE OFTHE ATTORNEY GENERAL OF TEXAS AUSTIN GROVER SELLERS ATIORNEY GENm*l.

Honorable George Ii. Sh8ppard Oouptrollsr of Fublio Aoocunts Auratin, Ts%as



### DosrSir: Opinion no. Q-7040

. RII (1) Whether a #INI

### paid oat ln oompromlro oi a will atmtart 18 

### te banrflolarler

SWmyour lrttrro oi ra 

### il;stetr of i&a. 1'. A. @enlay, ti furnlshrb by you, M 

### r8etc thr



### o? prrronal proport provision di6pomiug 

### arrtsin bepasstr

, and oontalnrd thle



### 0rmyproperty, d %lng and p.mramd or,

paragraph, after

, togethrr afth all of the 

### ngorthis will, shell I in equal ahareu In the Fnrbytrrlaa Churah in tba I the Southarm Prosbyteri~n uroh in thr Onltad Staten

Churoh In the Unltrd 8tatee (aomaonly known as the southern Frasbgtarlan Churoh) ti aqua1 sharee, tha ramindar of all 

## 177%onarabla George H. Sheppard - Fag8 2

tha property I mayavn 01:ba interested in at tha time of mybaath, in roe elapla, tomana$a, 

### 8411 or diepose of aa they may

### 844 prOp6r.*

Acontest of 

### thewillms madeby seven nlaoaa end nephews. OnJune 7, 1945, tha Judge of th6 Caunty Court at Lewof lallaa County entered an order Ulraoting the tam 

### urery e&dniatrator of the a&ate topay tha oontaetante tha auinof 7,000. B This order reeds in pert a8 follower



### Wn 

### this day.

. . ooming on to be heard the application a? the Temporary Admlnlatrator of this %&eta forapprov61 of a proporition to settle tha aontast brought against tha probata af this will by 6artuin oontaatantr
.: and it appaarlng to the Cwrt that all the parties ;t*intarast hara agraad to the prapof184 8attl6mantI 

### ana that it is to the advuatagr 

### orthe 

### banaflolarias of said will

. . . rapraeantal herain elro by apaoial oounaal, and that aafd proposed settlement Ir a raaeoMbla, duet, and bualnaae lIka disposition ot what may be8,dengarwa, long end 8~pansI~a lltlgstion, It IS th8w0r8 0ra8r8a that tha

18 ro orltlon to aattla aald 

### oontont by tha paymant o? 7, 00.00 

### to the aontaetantr, ba en4 haraby la approved; and tha Tamporary Adm5.niatrator la hereby ordered and eothorlaad to pay uid amount. , .*

In pragarlng the lnharlteaaa tax rapurt

Aitar this 

### oo~rmI.68, thewill 

### we n4mltt.d to probate.

, tha lxaoutor

bat Beken tha porltion that the $7,000, king $1,000 to aaah of the crontartenta, rhoula be aat up ar thair distrlbutiva ehera of the aetata and tax86 to them. SIn6a sash a2 tha oontaatanta would 

### have 6n exemption In axoasa of &l,OOO, thls wauld result In no tex fram then ior any part of the $7,000.

For a atatamant oi the fiats regardin& thw8aoond quaation,

ua quote the ?olluwi~ frum Ohalatter of 3, W.MoUIllln, your InharItanoa TaxAuditor:

*The eaoond quaation arisen as to the taxability of tha portion of the Brteta whIoh was wlllad to the Praabgtarlan Uhuroh of the Unitad Stetaa. The lxaoutor in prapati.u#l the lnherltanoa t6x report, ahowad this baquase (te taxable end wfth 62 axamptlon 

### or only $500.90. The Repr6..nt,stiVes of the Qtats nowoontant? that this w6a In arror 

### an8 tha 

### entire amount is non-texsbla a~ eoirg to e ral&ious 

### orppnizetion and la ta be 

### usad in 'Razes.

## 173

gonarabla 

### George 13,Shapperd - 

### Page f

line: Yhs 

### Fraabytarlan Ch&rah

### IDorganised along tha following

The looal ahurahae In e aar$eln 

### aaotion era organbad Into Prasbytarlae. Anumber of Prarbytarlaa oonstItuta e synod. Thagotaming body of the Churah ia oellad the General Assembly and la madaup of rapreeantativas from the various rreabyterias. TheGeneral ksaambly maata annually and at thsaa meetinglo paa~aa ordera, rasolutiona ato. and diraothowthe buaInara of tha Churah Is to ba oonthota4. These 4lraotitas ara for tha guidance of various Boaras oraated by 

### the @anareAAaeambly en4 throu& which the 

### bualnaaaof the ehnroh Pa

### oerriad on.

“Thaw Gana?al A~aambly la en Inoorporatad bo4y undar the lewr ctfNorth Caroline, TheGaaazul Aesambly has oraetad a Soar4 or Troataaa whoa* offiaa ir looata4 et Cherlotta, Morth Car0liaa. When

### bepoastaor donations 0r

f: ropsrty 

### era raoairr6 by the 

### Ghureh,thr, usual 

### prooa4ura

a for theBoar4 of Truatara 

### to take 

### ohar&aofhen4linmg this 

### property.Thelooms or 

### other Pro88868 fromthaaa 

### propartlra era dlrtributad by

### tha Truakaa in eooordenoa with 

### diraatlns from the Gan8ral Asaa6bly. In oeea ot propartybaquratho4 or donated for a 

### spaolfle purpoaa, it la handled in l

ooordenoa with the 

### terms of uuoh baquaat 

### or Uanetlon. Whenproparty la raoslvad by baqaaat or 4onstIon end no ~paoiria pur$ose 

### ia Indiaetad, the proparty Is uaad for any 

### purpose wldah 

### the G4narel ~Assambly my think 

### proper. It oatzbe 

### apsolY10 diraotiva 

### order funds whioh it has on hen4 wadfor

el psoiflo pu 088 or ln e 8poolfIo arae* In the instant 

### owe, the Chnara Assembly byresolution T f.yse,” that l/2 or tha Mrs. F.

### A, Manley %&eta ba 

### usaid

Tha

### Traaaursr ,ot the Churoh 

### edriser mathat the Churoh a~am4a approrimatal~ $13,000.00 

### par fear In Taxa~s and that l/Z of the fund8 

### darlwd fry thia estate will, 

### under the Qiraotlva mmtloaad, ba used in l’waa.
*The Ganarsl Haa4qusrtars of the Prasbytarlan 

### Church of the Unltad States $s looated at I.120 Liberty Bank Dullding, Dallas, Tares an4 has bean 

### looatadinDallw~ sin08 1922.

“1daolinad to allow the l/2 ai the 

### ssteta going to the frasbytarlan Churoh of tha ~nitad States 

### a8 Owmpt~ It la apparant from the WI11and from the manner at orgenieatlon of this Churah, that these funds oould be uasd for any purpose a114et w pl.404that the Qanaral 

### lrsaemblg

shoulddlraat. In 

### other words, its uaa was inmnora bla Qsor&~ li. Sheppard - Fags 4

no eenee limitad to Toxae. Iti appanrs to mathat tha rsal quastion prssantsd 12whether the rseoLiAl.on paeaad by the General -ssss?bly nftar draedent’s death to the eiisct that l/2 OZt!iis eatat@ was to br uaad in Taxsa would chare,,a the canerel rule end Ln4k4this bequest rxanpt. II!this ooncaotlon, I cell your ettentlon to Attorney Se~mrel*e opinion +G-2816. Thla opinion oallr attsntion to the aa~e ol ran Jscinto Ketlonel Bank te. Sheppard, 

### 125z,::.

(26) 715, in %lch tha 

### Court statad a8 followa~

manordid the Xl1 of ‘Tilroy require the funds derived from hle davlso to be uard In Texas. Claaorly undrr the Chartar and 

### saidX11, the beneficiary oorporatlon aould hava uaad thr dariea anywhara the dlraotors, thanof, should detarmlne in their maatlngs in Qhlo. *

It a?psars fxom tha Attornay Gsneral*s ruling that thslr porltlon la t&at the Kill 

### lterlf met ll@t tha asa OS tha proparby Involved to tha 

### StateofTaxae. 

### Thisyould

aoam to ba ospaofally trur when ths property ie nillad to an organleatlon whioh by Its Tary nature expands its funds 0~42~a larga area and of whloh thr state of Taxae Is only a part. As pointed 

### out in the ;rttornag Ganaral*s Cplnlon if an agraamant after daath of tba deoedent was parmittad to ohan@ the taxable status of a baqurat than there would 444n .to~~bano raaaon why othar taxahla b+naiiolarlse would not ba antitlad to so Oontreot. A baqueet to a non-relatlva m ht bythlo roeaodurcr baooma taxable to a parson with a hghsr sx8mpt cpnand ardapr tax Y f sltogsthnr.”

Your first question hea bsan pas&ad upon and ssttlad by GranaV. E.fo,nn,162 S;W. (2) 117, (writ of 6rror refused). In that 0444 thera vtaaa will oontsat, and the wllL was adofttrd to probate tiyfana~raad jud~raent of the Frobata Oourbwh@h lncorporstsd 

### in It the settlsmnt eereamant waohad batw4m the parttas. Appallant, whowae tha pereon nnmed In the will to rrosits all ot;dacrdsntva property, contended thet only the BUSIof $98,4%82 peeeed to her end that aha owed taxes to the State on this amount, and that eha DIpsdno taxae on tha balanaa of ths a&ate whioh wabgiven to the/’ Qontestant in comprcml44 of tt:e oontsat. Th4oourt reviewed tba authorities and held that the entlra aatate wae taxable to appsllent. The rationala of the opinion Is as follows:

“It Ie our si.4~ that ahe did reoolw all the property by th3 term of We will. The court oould not alter the will end the fsct that eke gave up a part ,oPthe property to 3~)Esgood her title to the balaw4 did not altar It.”Bonorable George R. Shappard - ra(lr 5

Gftha ooutentlon that the &mountrswlmd by the l o~, who

wes tba contestant, was not received frool appellant but wanreaelve6 troln the father’s estate by virtue of ths laws oi deeaont and dlstribution eince his rkht to maintai? ths aontest was dsrlvsd eolslg from his status ae sn hair oz the testetor, the aourt dar

n Reg~rdlesa of the ae,rec;rwnt whloh browht it ebout,*t~a’fuat ramalos that ths will of the deosdent wss probated and by 

### the terns of it appellant reael+ed all ot the estete. Mthout probstinp, of the will she would hatie got no part of the 6etats. Byagrerlng ios the oonteetant to take a part of the eetste whloh the will gave to her, she purohasod her peaae and thereby scoured unqurationrd title to the bnlanoe. It In true that the eon wee able to maintain the .aontest bemuse of his heirship, a&dso in a
aenae being an heir did enable hia to gat aportion of the estater 3nt appellant cli& not oonwnt for him to share the set-ate beoause ha was an heir but only beoauee he was
a contestant ot the will whloh gave all or the e&ate to her. There is ‘nothing to foaioote thab the son would ha?8 gotten anything If be hsd not oanteated the will, Orthat othar ohildren oi the doordent; ii he had left aDy, would have shared In the eoapromise eettfsment he&they not bsen psrtiee to the aontest., Both the appellant and the probate aourt drslt with the aon, not as en heir rserelf, but an a oontestsnt OSt!n3will.”

Aolosely analogous sltuetlon wae rwlrwr6 by thl8 ‘

. department 

### in Opinion 

### So.0-6035, a oopy of. whloh I6 enoloeed .herewith, and it ma he16 that the sttorn8f’a fe8s,.%n queatian rhould not be dmluated befors ooqmting ths tux.

In answer to your rirst question, it is our opinion that 

### the$7,000paid out lr. compromise of the will oonteet ia taxable to the two benerloiarlea, unbar thr *Ill.

t?e

### paw nowto a oonaidrretlon oi focir second question, whloh arises untier that portion or nrtiole 7122which reada 5s fOllowa t
Y3-ovlded, however, tha,b 

### thloArtlale shall not apply

on property. pansine to or ior the ~86 oi the United Stat88
or any rel&ioue, eduostional or ahartfible organization when mob bonueat. devise or ai$‘t Ia to be used wlthla thla $&&a” 

### I

xq&aelee~pplleiITmnorublr George H. Sheppard - Pags 6

pie lnejority or deoleitma from other jurladlotlons, under similar atotutse, 40 not allow aremptiona from the payment of an 1nherltenae tax to a roreign religious, oharltnble 

### or edueatlonal sorporo tion, tlven ii” it oarrids on same of Its work sfthin the utete.
me rensons ror euoh rule hsve boen stated verioualy ae follower

*Tt~xaemust be relaed ror the support a:%dconauct ot 

### the ~ovrrmmnt. ?‘Jxamption to oherltable, eduoational, and religious orignlzatlona 

### isbottomed upon 

### t&efaotthatthey rennder ear-doe to tha &ate, for whloh reaaons they 

### are relieved or oertaln 

### burdena of taxation. Thaetf8ob of an sxamptlon Is equivalent to an appropriation. It oannct be aal4 to have been the intent of the legislature to m&e epproprlatlona for the benerit or Mlntanaao8 or forean oharitirs, whioh, at best, have a

### reaoteohanor only to benefit the oltizana of this atate.” 

### Morgan v. A. T, &9. F. Ry. Co., 116 Kan. 

### 175,2251'. 1029,3i,

ii. L. R, 

### 625,

“:vhile wemayassuae that th6 

### CallfOrnl.tk 

### aorporatlon would 

### raltmllJrrxwmi61 tha provfrlonr or the will in tha


### usaofthe fropwty, yet the 

### rtatewouldhave 

### Tao vlsit+eL power riiablXI&it to enforar ooaplianarr True, the 001 poratlon is reglstrmd in the date and permlttad to 40 businesr.thrrein, but itla not soizpelled to 

### mmnln tn 

### t&a 

### stata.”InraThomas~a Sa$aba, 

### 185Sarh.

### 113,53I"(2) 305.

*It 1~ the pollc ~ai soaimy to enoouqga bonrvolrnoe and oharity. But it 9a n0t 

### the proper funotloa .of a ptate to go outside its ownl.imibe, and 

### divoteItsramararcl to ,-. suppo*t the 04uae of rqllghn, oduoatiotl, 

### or 

### laiaalons $or 

### ~’ tha benerlt of mankind ~st large.@’ Iltuaphreya v1 9taM. 70 Ohio St, Rep. 67, 70 X.3. 

### 957,65L.R.A. 

### 776.

Theaa rules ham been oited with apprwal by theCourt 

### of Civil Appeals ln ?SanJaolnto Rational Rankv, Sheppard, 

### I.25 S'G(2) 719. AlthouiJh that easa’ was oontrokled by statutes as thrg existed. in 1931 (at whiah time Artiole 

### 73.22 provf(lrd

for an exemption “ii : prrssl~ to a rellgloas Estate an4 th6 twauesb ir’t: . 

### organlzzio;looated rrLthln this be.u~rd hJ, bhis 

### 3tew) and the statutes have been sisended sinae to reaovu th llmltation of location of the or enlzation,

& tho obsemt$on Or the ok on t&a Phaitatlon Ofuse vii hln this jtate, aa quoted byyou in your request, Is the only 

### expresalox

by the aourts of this Stete on the mattsr. 1-tie frobebla that the oourts will follow this vials ln construing the present Artiale 7122,~onore#lr G4or&e E. Sh4pp4rd - P4ge 7

In acoordano4 with this rxprcrasion, w4feel that4 baqu44t In aada 4x4mpt under Artlolr 7122 only when the baqu4ut Ie 4prcIfIoally roqulrad by the tarme or the will ta br uesd In this Stat4 or whan th4 powsra of the benaflclary er4 1Imltad In such e menner thot It mnnot lagally meka ~44 of ths bequoat outsida of this :itate. Thr 4msndaanta oi brticla 7122 In 1931 and 1933, rrmovlrg CL4rsquiramrant that tha aorDorets bsnsrlolary ba “looatad” In tlil.4 Liteta Indloata 4 olaar l4glal4tlv4 intrnt to 

### put ItreIgn end dom4etIo corporation8 of this tgpa on ths tmm tooting If tha b4queiet Is requlrad to bs 484~3wlthln this Stats.

Mrs. Xanla.y*e will b4qu44thad sod drvlerd to ths i:rsrbyfarIan Ohurohof the United Statse on4 half of bar property “In 

### raa elmplr, 

### to menags, 8411 or dispoas of aa thhsy m4y e44 propaP, and without 4ny 1ImItatIon a4 to plea4 of Its u44. Ae rtetad by your Inharltanor

‘Ibx Auditor, tha 

### afl'alrs oi’ tha Churoh ar4 oonduoted by and undar Zh4 rup4rvIaIon and oontrol of tha tinare Ae44mbly, which Is 

### Inoorporated undsr tha law4 oi 

### Korth Carolina. The Caneral 

### Aseambly Is thr aotual raolplrnt of tha proparty. 84~104, th4 propsrty he8 bsrn rao4Iv4d by th4 

### foreign oorporatlon, and tha 444antLal 

### ooatrol of It4 

### diapoeItion I4 In that oorporatlon ovar which thle Btstr hae no oIrltorIa1 

### powar
or 4uparoIsIon. The Oonarel harrsmbl~Llr,in ths edmInIstratIon of tha buaInae4 

### or tha Churoh whloh, by Ita~rary nature, satand 

### ovara.’ large aroe o? whioh tha 

### Stateof Tdaaa I4 only 4 part, wet axpand Its funde omr euah large ~44. 

### ThaeraaIsnot,bythetermaoftb wIl1 

### mari, rsstriotrd In 4ny my. UnCmrall or thr rulee ntatad 8bova, thI4 baqusst is without tha rxamptfon containad In hrtlola 7122 and Is rabjrot to th4 lnharltanoa tax.

We4r4 raturn- hanwIth your ii14 on thlr ~4~4.

, Vary tmlf youm,

ATIWRM‘GY

UEmRALOFTEXAs

Aeslstsnt

AL~Mlll

Knalosurae