Ron. Robert S. Calvert 

Comptroller of Public Accounts 

Capitol Station 

Austin, Texas Opinion No. S-62 

Re: Exemption from inheritance 

tax of bequest to such corporation, association or trust 

fund as trustees may select 

Dear Sir: 

for certain charitable pm.- 

poses. 

We quote the following excerpt from your letter requesting the opinion of this office on the above-captioned subject. 

*We desire the opinion of your office with 

respect to the correct exemption applicable to a 

bequest made under Clause XI asamended by 

Clause SMTH of the codicil to the last will and 

testament of Godcheaux A. C. Halff. deceased, of 

Bexar County, Texas. 

‘Clause XI of the will as amended by Clause 

SDCTH of the codicil devises three-eighths (3/8) 

of the residue to the decedent’s brother and nephew. 

or thesurvivor. as Trustees for public charitable 

uses and purposes--one-half (l/2) to the National 

Jewish Hos ital at Denver, Colorado, and the other 

one-half (1 P 2) of three-eighths (3/8) ‘to such corporation, association or trust fund as his Trustees 

may select for any one or more or all of the following charitable purposes for the relief of the poor. 

to wit: Hospitalizationi the promotion of health; the 

relief of the afflicted and other medical aid; the relief of poverty; the advancement of education; governmental or municipal purposes.’ 

-The surviving trustee, Hugh A. L. Halff, nephew of the decedent, has made and filed with this 

department an inherftance tax report for the Estate 

of Godcheaux A. C. Halff. and under Schedule E 

thereof has reported the one-half (l/Z) of threeeighths (3/8) of the residue devised to the National 
. 

c 

,... 

&Ion. Robert S. Calvert. page 2 (S-62) 

2% 

and a tax due thereon in the amount of $203,968.57. 

The other one-half (l/Z) of three-eighths (3/8) of 

the residue the Trustee is claiming exenp t as provided in Article 7122. 

‘In view of the holding in the Presbyterian 

Case (198 S.W.Zd 282) we ask you to advise this department whether the one-half (l/2) of three-eighths 

(3/8) of th e residue devised to the Trustees for selected charitable purposes by the Trustee’s is exempt 

or taxable as provided in Article 7122.” 

The pertinent provisions of Article 71224lass E, 

V.C.S., are the following: 

“Foreign bequest. If passing to or for the use 

of the United States, to or for the use of pny other 

person or reIigious. educational or charitable organization . . . the tax shall be . . . provided, however, 

that this Article shall not,apply on property passing 

to or for the use of the United States or any religious, 

educational or charitable organieation when such bequest, devise or gfft is to be used within this State;* 

In the Presbyterian Church case, .the decedent bequeathed one-half of her ,estate to the Presbyterian Church in the 

United States. No limitation as to ‘use. of the property w.ithin the 

State of Texas was expressed fn the,wfll. The Presbyterian Church 

operates in many states and in foreign lands. The proper Church 

authorities. sfter the decedent’s death, obligated the Church to use 

the bequest in its entirety in then State of Texas. The Court held 

that the “manifest purpose of the statute is to exempt a devise or 

bequest passing sunder a will from the payment of the tax imposed 

onfy when such devise or bequest.is to be used in this State. 

The Court also said at page 285: 

*Nor .is the fact that the.partfes have stipulated 

that the appellant Church has. promised and will use 

the property fn Texas material to a proper coaetruction of the statute. The Legislature has provided no 

form or ‘method by whfch, the taxing authorities might 

ascertain whether a larger or lesser use may be made 

of the property by the devisee or legatee in order to 

secure or create an exemption from the payment of 

the tax imposed by the statute.” 

The facts presented by your,request are clearly 
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: j . . 

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Hon. Robert S. Calvert, page 3 (S-62) 

governed by the Presbyterian case. Mr. Halff’s will contained no 

language limiting the trustees in their selection of a charitable corporation, association or trust fund to Texas charitable enterprises. 

Thus the property passed upon Mr. Halff’s death without restriction 

as to where it will be used. It is therefore not within the overall 

exemption provided in Class E but is taxable thereunder. 

SUMMARY 

Property passing by will to certain trustees 

to be given to such charitable corporation, association or trust fund as said trustees may select is 

subject to an inheritance tax under Article 7122. 

V.C.S., since no limitation as to use of the property 

within the State of Texas was expressed in the will. 

Presbyterian Church in the U. S; v. Sheppard, 198 

.S,W.Zd 282 (Tex. Civ. App, 1946, error ref. n.r.e.). 

Yours very truly, 

JOHN BEN SHEPPERD 

Attorney General 

APPROVED: 

W. V. Geppert 

Taxation Division 

C. K. Richards 

Reviewer 

.: BurnelI Waldrep 

; Executive Assistant 

.:: 

5:;. John Ben Shepperd 

;:i~ Attorney General 

. 

‘Marietta McGrego# Creel 

Assistant