Ron. Robert S. Calvert Comptroller of Public Accounts Capitol Station Austin, Texas Opinion No. S-62 Re: Exemption from inheritance tax ofbequest 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 onthe above-captioned subject.

*We desire the opinion ofyour office with respect to the correct exemption applicable toa 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 thewill 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 2) of three-eighths (3/8) ‘to such corP poration, 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. towit: Hospitalizationi the promotion ofhealth; the relief ofthe 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.

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

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and atax due thereon inthe amount of $203,968.57.

The other one-half (l/Z) of three-eighths (3/8) of the residue theTrustee is claiming exenp tas provided inArticle 7122.

‘In view ofthe holding inthe Presbyterian Case (198 S.W.Zd 282) we ask you to advise this department whether the one-half (l/2) ofthree-eighths (3/8) oftheresidue devised to the Trustees for selected charitable purposes by the Trustee’s is exempt or taxable as provided inArticle 7122.” The pertinent provisions ofArticle 71224lass E, V.C.S., are thefollowing:

“Foreign bequest. Ifpassing to or for the use of the United States, toor for the use ofpny other person or reIigious. educational or charitable organization
. . . the tax shall be

. . . provided, however, that this Article shall not,apply on property passing toor for the use ofthe United States or any religious, educational or charitable organieation when such bequest, devise or gfft is tobe used within this State;* Inthe Presbyterian Church case, .thedecedent bequeathed one-half of her ,estate to the Presbyterian Church inthe United States. No limitation as to‘use.ofthe property w.ithin the State ofTexas was expressed fnthe,wfll. The Presbyterian Church operates in many states and inforeign lands. The proper Church authorities. sfter the decedent’s death, obligated the Church to use thebequest inits entirety inthenState of Texas. The Court held that the “manifest purpose of the statute is to exempt a devise or bequest passing sunder awill 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 andwill use the property fn Texas material to a proper coaetruction 

### ofthe statute. The Legislature has provided no form or ‘method bywhfch, the taxing authorities might ascertain whether alarger 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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.’ 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 toTexas charitable enterprises. Thus the property passed upon Mr. Halff’s death without restriction as towhere itwill be used. It is therefore not within the overall exemption provided inClass E but is taxable thereunder.

SUMMARY Property passing bywill 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 thewill. Presbyterian Church inthe 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:;. JohnBen Shepperd ;:i~ Attorney General

. ‘Marietta McGrego# Creel Assistant