. 

Honorable Robert S. Calve& 

Comptroller of Public Accounts 

Capitol Station 

. Austin, Texas 

Dear Mr. Calvert: 

Opinion No. C- 37 

Re: Whether shares of stock 

are subject to lnherltance taxes upon death 

of husband where shares 

had been Issued to husband and wife as joint 

tenants with right of 

survlvorship and had 

been purchased by the 

husband with the separate funds of the wife. 

Your letter requesting the opinion 

the above captioned matter reads as 'follows: 

of this office on 

"We desire the opinion of your office regarding the Inclusion for ~lnherltance:tax purposes of stock held in 

joint tenancy with rights of survivor-, 

ship, and not as tenants in common, 

where~~the st,ock,was ,purchased by the 

husband withthe separate funds of his 

wife. 

"W. L. C. Poetter died testate, a 

resident ~of DeWitt County on December 4, 

1961, and his wife, Mrs. Virginia L. 

Poetter, who quallfled as Independent 

executrlx,/made the required reports as 

provided in the Inheritance tax law to 

close the estate for Inheritance tax 

purposes.~ Mrs. Poetter's ,report was 

accepted as filed and the tax paid. 

"Subsequently, a request was made 

by Mrs. Poetter and refused by this 

Department, for a waiver of consent to 

transfer 255 shares of San Antonio 

Drug Company stock standing In her name 

and the name of her deceased husband 

ads joint tenants with rights of 

154., 
Honorable Robert S. Calve&, Page 2 Wnlon No. c- 37 

We 

davlt: 

survivorship and not as tenants in 

common, because the stock was omitted 

froni her inherItan& tax report. 

((Mrs. Poetter has now submitted an 

affidavit to this Department setting 

out the facts wlth respect to the purchase of this stock and her attorney 

has submitted a memorandum brief glvlng 

his opinion that this was the separate 

property of Mrs. Poetter and, therefore, 

no'part of the estate of W. L. C. Poetter 

for inheritance tax purposes. Both of 

these Instruments are enclosed herewith. 

"It appears to us that one-half.the 

value of this stock Is lncludible In 

the inheritance tax report and a tax 

due thereon in view of your Opinion 

NO. w-1348. Please advise whether 

or not our view is correct ln this 

matter." 

quote th6 following.excei@ 'from Mrs. Poetter's ,affi- 

"Au‘ing the llfetlms of my husband, ,'~ 

Wilb&t C. Poetter, who d&d December 4, 1961, and for many years prior, 

thereto I maintained a checking account ln the First National Bank of 

Yorktown, Texas, styled 'MOPS. W. C. 

Poetter?: 1 opened this account ln 

the early 194Ols, prior to 1946, wh& 

011 was begun to be produced from my 

separate lands In Dewitt County, 

,Texas, and I placed my royalty checks 

from th& production of said oil into 

this account-. I placed no other fQnds 

in the account except my royalty 

checks, which were my separate funds, 

and I dld ~this In order to,keep my 

separate funds apart from any community property fund& of my husband 

and myself. No community property 

furids were ever~placed into this account, and, :.h.ls, acccunt was my sole. 

aa separate property. 

. I ,..a_ - I-. 
. . 

Honorable Robert S. Calvert, Page 3 Opinion No. C- 37 

“From time to time my husband, 

Wllbert C. Poetter, would select varlous corporations In whS.ch I might lnvest my funds as they accumulated in 

my separate account aforesaid and at 

his suggestion we would purchase stocks 

in the corporations for me, he placing 

the order for same with the various 

brokerage firms or companies and I would 

then draw a check on the aforesaid account In the First National Bank In 

Yorktown, Texas, and thereby use my 

separate funds to purchase the stock 

as part of my separate estate. 

"My husband, Wllbert C. Poetter, 

when he would order the stock for my 

separate estate and property would 

have the shares Issued as follows 

(or similarly) 'Wllbert C. Poetter and 

Mrs. Virginia L. Poetter, as joint 

tenants with right of survivorship 

ana not as tenants In common'. This 

was done by him under the Impression 

that this would make the stocks easily 

transferable or sold In the event of 

my death before him, whereas If the 

stocks were In my name alone he felt 

there would be much Inconvenience 

ana expense in transferring or selling 

the stock. There was no understanding 

between my husband and myself that 

any part of the stocks In question 

were to be anything but my separate 

property during my llfetlme.and my 

separate funds were used to purchase 

these stocks under the understanding 

that the stocks purchased would be my 

separa.te property and would be no part 

of his property or estate." 

The memorandum brief submltted In connection with the 

taxpayer's posdt.lon in this case contains the following para- 

.graph: 

"It is our feeling that despite the 

stocks being lcsued in the joint tenancy 

manner as above set forth that the actual 

ownership was still based on the intention 
. 

Honorable Robert S. Calvert, Page 4 Opinion No. C- 1, 

of the parties and the source of the 

funds used to purchase same. . . . 

.Wlth this ln mlnd we feel that the 

above shares pald for by Mrs. Poetter's 

separate funds were her separate property. 

this." 

Please advise us your ruling on 

Attorney General's Opinion No. ~-1.348 (Jtie 8, 1962) 

held that the decedent's one-half interest In a bankaccount 

which the decedent and another held as joint tenants with 

rinht of survlvorshlv was sublect to an Inheritance tax when 

received by the survivor at &e decedent's death. The opinion 

consldered~the case of Davis v. East Texas SaVineS 6c Loan 

Aasoclatlon, Tex 354 S.W.2d 926 (1962) which held 

that a savlruza and lokiificate Durchased by the husband 

with his se&rate funds an&issued *'hia name,-but subsequently 

reissued to him and his wife as ;lolnt tenants with right of 

survivorship, passed at his death to the wife. At page 931 

the Court pointed out that when the"contract was.ma$e with 

the savings and loan aasociatlon, the wife became vested wlth~ 

a present;though defeaalble, interest ln the deposit. Her 

interest would have been defeated If the certificate h&d been 

changed 3y her husb+nd or the deposit wl,thdrawn'before his 

death, or if she.hqd predeceased-h&n, but-.slnce.none of these 

things happened, at hls death, the.@f‘e bCcsme the sole owner 

of the entire deppsit. 

me Davis case-.,cannot bediatin&lshed from the case 

we are pr&ay consld&Lng becauae.lt lhvolved a aavlngs 

and loan certificate and this case lnvo&ves stock. When Mr. 

_' Poetter, acting as agent for his wife, and with her knowledge 

and consent ati disclosed by Mrs. Poettercs affidavit, made 

the contract with the various corporations from which he pur-' ' 

chased the stock4 and When then stock was-issued by the varlous 

corporatiO;ns td Wilbert C. Poetter and Mrs. Vlrglnla~L. 

Poetter, as joint tenants with I'lght of survlvorshlp and not 

as tenants inc&nmon", both joint tenants becam vested with 

'a'present, though defeasible, lnterest,ln the stock. 

. The fact that Mrs. Poetter an& her husband Intended to 

preserve the separate ctiacter of; her property cannot change 

the legal effect of their actual transactions. You are 

therefore advised that at Mr. Poetterls death, Mrs. Poetter 

received his one-half joint Interest in the stocks Involved, 

and that such amount Is subject to an inheritance tax. 

. , 
, . 

Honorable Robert S. Calvert, Page 5 Opinion No. C- 37 

SUMMARY 

Where a husband used wife's separate funds, 

with her knowledge and consent, to purchase stocks 

Issued In his name and In his wife's name as 

joint tenants wlth right of SurViVOPShiF md not 

as tenants in common, the husband's one-half 

interest became vested at the time of the purchase subject to being divested, and was, at 

his death, subject to an Inheritance tax upon 

passing to the survivor under the terms of the 

contract, despite the fact that the husband and 

wife had Intended the stock to remain the separate property of the wife. 

Yours very truly, 

WAGGCNER CARR 

Attorney General of Texas 

By:~~&%/%+&+~"y^c~ 4 

Marietta McGregor Payne. 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

Jack Nor-wood 

Howard Fender 

Frank Booth 

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