Auamiw .a. ‘l-mx~n 

January 7, 1960 

Honorable Robert S. Calvert Opinion No. WW-772 

Comptroller of Public Accounts 

Capitol Station Re: Is a transfer by virtue 

Austin 11, Texas of an antenuptial agreement, to take effect 

after the grantor’s 

death, subject to an inDear Mr. Calvert: her1 t ante tax? 

Your letter requesting our opinion on the above 

question sets out the following facts: 

“Mr. J. B. Cage died testate, a resident of San 

Patricia County, on April 6, 1958. On July 25, 

1953, the testator entered into a pre-nuptial 

agreement with Mrs. Maurine Schultz, a widow, in 

which he conveyed to Mrs. Schultz his homestead, 

retaining his right to live in said homestead 

until his death, and. also for his daughter to 

maintain a room in said homestead forso long as 

she remains single, and $250.00 per mdnth to Mrs. 

Schultz so long as she lives. Shortly thereafter Mrs. Schultz and the testator were married. 

"Subsequent to the date of marriage of Mrs. 

Schultz and Mr. Cage, Mr. Cage executed his last 

will and testament on the 29th day of April, 

1954, wherein he recognized all the provisions 

of the pre-nuptial agreement and devised the 

balance of his estate to his daughter. 

"We are now confronted with the question as to 

the proper inclusion and handling of the value 

of the annuity as well as the value of the homestead for inheritance tax purposes as provided 

in the pre-nuptial agreement. Please advise this 

department whether or not the homestead and the 

value of the annuity provided In the pre-nuptial 

agreement should be deducted from the net value 

of the estate devised to the daughter, or charged 

to the wife as a deed, grant, sale, or gift made 

or intended to take effect In possession or enjoyment after the death of the grantor or donor.” 
Hon. Robert S. Calvert, Page 2 (Opinion No. WW-772) 

The antenuptial agreement clearly sets out that the 

property 

death of 7 

rant '. shall not be effective until after the 

the husband). . ." 

per month was to begin '. . 

and that the annuity of $250 

.upon and after the death of 

(the husband). . .' 

such 

Article 4610, Revised Civil Statutes, authorizes 

pre-marital stipulations as follows: 

"Parties intending to marry' Mayo enter Into 

such stipulations as they may desire, provided 

they be not contrary to good morals or to some 

rule of law; and in no case shall they enter into 

an agreement, or make any renunciation, the object of which would be to alter the legal orders 

of descent, either with respect to themselves, In 

what concerns the inheritance of their children 

or posterity, which either may have by any other 

person, or in respect to their common children; 

nor shall they make any agreement to impair the 

legal rights of the husband over the persons of 

their common children. No matrimonial agreement 

shall be altered after the celebration of the 

marriage." 

The admonitlon,contained therein as to altering the _ _ ^ _ _ . 'liegal orders or descent;" 1s somewnat vague and. nas apparently never been satisfactorily defined. See 23 Tex.Jur., 

Husband and Wife, Sec. 20. However, we believe that the 

oresent agreement is not In conflict with that inhibition. 

Kunge v. Freshman, 216 S.W. 254 (Tex.Civ.APP. 1919). See 

also Groesbeck v. Groesbeck, 78 Tex. 664, 14 S.W. 792 (1890). 

Our Inheritance tax statute, Article 7117, R.C.S., 

levies a tax not only upon property passing by will or by 

descent and distribution, but also on that which passes 3, .by deed, grant, sale, or gift made or intended to tak& 

effect in possession or enjoyment after the death of the 

grantor or donor. . . .' The question of the application of 

inheritance tax to transfers under antenuptial agreements, 

which transfers do not become effective until after the 

grantor's death, has not been touched upon by any~ Texas 

cases. A survey of the other jurisdictions reveals that the 

authorities are in conflict. See 85 C.J.S., Taxation, Sets. 

1144 and 1147 (3) (b); 28 Am.Jur., Inheritance, Estate and 

Gift Taxes, Sets. 1.33 and 185. 

The earlier New York cases held such transfers exempt from taxation, 

ea) that marriage, 

on the theory (often not clearly~ expressor the promise of marriage, supplied 
Hon. Robert S. Calvert, Page 3 (Opinion No. WW-772) 

sufficient consideration for the transfer, and therefore the 

recipient was entitled to payment as a creditor from the 

decedent's estate. In re Baker's Estate, 83 A p.Div. 

82 N.Y. SuPp. 390, aff'd. on opinion below, 17 8 

530, 

N.Y. 575, 70 

N.E. 1094 (1904); In re Vanderbilt's Estate, 184 App.Dlv. 

661, 172 N.Y. sipp. 511 fffa lth t 

123 N.E. 893 (1919); Re'S%moli wl~l"~ppo~~v 

226 N Y 638 

435' i8i N'Y. 

Sum. 542, aff'd. without OP., $30 N.Y. 559,'130 h.E. 893 

(1920). But the opposite result was reached following a 

1930 amendment of the New York estate tax law, which levied 

the tax on all property In which the decedent had an Interest 

at death, Including property which he had transferred In contemplation of or to take effect In possession or enjoyment 

after death, except where such transfer was to a bona fide 

purchaser for full and adequate consideration In money or 

money's worth. The court In Re Seltz' Eatate,T3T-.mv. 

206 2bOm Supp. 122, 262 N.Y 32 ltlb N ti 193 (1933) 

heli that, because of the addition 0: the u&rllnea reqdrement, a promise to marry in an antenuptial contract aid not 

furnish the required consideration; therefore, the transfer 

was taxable. 

The court held in Re Oppenheimer, 75 Mont. 186, 243 

P. 589, 44 A.L.R. 1470 (192b), that such transfers were taxable where the statute taxed gifts or transfers effective in 

possession or enjoyment at or after the grantor's death, even 

though not containing the requirementthat there be adequate 

consideration "In money 6r money's worth." Under the antenuptial agreement there Involved, decedent's widow was to 

receive $150,000 In Installments beginning one year after his 

death. The court, after quoting that portion of the statute 

taxing transfers effective In possession or enjoyment after 

grantor's aeath,~ proceeded as follows: 

"It is obvious that, had the section quoted above 

merely provided that personal property passing by 

will or the laws of succession should be subject 

to the tax, the Intended scheme of taxation would 

have been a complete failure, for the reason that 

transfers, made only to take effect after the 

death of the grantor, would or could be substi; 

tuted for wills and intestacy in order to escape 

the tax. . . . 

makers, 

It was never Intended by the lawwhen enacting the inheritance statute, to 

permit the owner of an estate falling within its 

provisions to continue in possession and enjoyment of all his property and. the rents and income 

therefrom during his lifetime, secure In the 

knowledge that, upon advent of death, the legislative intent would. be effectually circumvented 
. - 

Hon. Robert S. Calvert, Page 4, (Opinion No. WW-772) 

by some device such as this. Clearly, a gift or 

transfer for a valuable consideration must be in 

praesenti in order to escape the tax. A deceased 

person can have but one estate, and all property 

owned by him at the time of his death, Including 

gifts or transfers previously made by him which 

are not to become effective until after his 

death, is taxable.” 

In Re Koeffler, 218 Wis. 560, 260 N.W. 638, 99 A.L. 

R. 944, reh.aen. 218 Wis. 567, 261 N.W. 711, 99 A.L.R. 949, 

holding that such a transfer under an antenuptial agreement 

Is not taxable, the court criticizes the reasoning in the 

Oppenheimer case as being too broad, In that a full application OS the theory would tax all bona fide creditors of the 

decedent upon payment of their claims from the estate. This, 

however, seems a rather tenuous and unwarranted extension of 

the above rule. 

The transfer under an antenu tial agreement in 

People v. Estate of Field, 248 111. 17, t 99 N.E. 721, 33 L.R. 

. . . 30 (1910) was held taxable on the theory that it 

replaced the widow, s’claim for dower. For further authorities see annotations in 4 A.L.R. 461, 44 A.L.R. 1475, and 

167 A.L.R. 461. 

Comparing the two views, we are convinced that the 

conclusion reached in the Oppenheimer case,is preferable, 

for the reasons therein expressed. you are therefore advised 

that the transfer of the homestead to the decedent’s wife and 

the annuity provision by virtue of the antenuptial agreement 

should be charged to her as a deed, grant, sale or gift made 

or intended to take effect In possession or enjoyment after 

the grantor’s death, and hence subject to the inheritance tax. 

SUMMAiY 

Where provision was made for transfer 

of property and. for an annuity to the wife 

in an antenuptial agreement, both to become 

effective after the death of the husband, 

the transfer is taxable to the wife under 

Article 7117, R.C.S., as a deed, grant, 

sale, or gift made or intended to take 
” c 

Hon. Robert S. Calvert, Page 5 

effect in possession or 

death of the grantor or 

(Opinion No. WW-772) 

enjoyment after the 

donor. 

Very truly yours, 

WILL WILSON 

Attorney General 

JRI:bct 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

y;et;;vT;Gregor Payne 

C: Dian Davis 

Charles Cabaniss 

REVIEWED FOR THE ATTORNEY GENERAL: 

By': Leonard Passmore