Opinion ID: 2618070
Heading Depth: 1
Heading Rank: 1

Heading: The argument of the Commissioner is:

Text: First: That irrespective of the community character of these funds the trust agreement under which they were held resulted in the postponement of the possession and enjoyment of the money by Mrs. Bejarano until the decease of her husband. Second: That the nature of Mrs. Bejarano's interest in the community property is one which by its nature, under the laws of California and Texas, postpones its possession and enjoyment until the death of the husband. As to the requirement of a gift or grant it is said that the act of the husband in agreeing to participate in the retirement fund program constituted a gift or grant within the meaning of the statute. The context within which this case must be considered needs some explanation. The trial court concluded that the nature of the property rights in the funds in question was dependent on the law of the states of Texas and California where they were acquired. The Commissioner concedes this approach to be the correct one. This viewpoint is set forth in 2 American Law of Property, sec. 7.18 (Casner ed. 1952), where the author concludes that under generally accepted principles of conflict of laws, marital interests in movables acquired during marriage are determined by the law of the domicile when acquired, and that community property retains its character as such when it is removed to a common law state. Tomaier v. Tomaier, 23 Cal.2d 754, 146 P.2d 905; King v. Bruce, 145 Tex. 647, 201 S.W.2d 803, 171 A.L.R. 1328; Restatement, Conflict of Laws, sec. 292 (1934). See also 11 Am.Jur. Community property, sec. 9 (1937). Although the Colorado statute does not expressly treat the legal consequences of holding community property, we are of the opinion that the rights incident to this form of ownership are so plain that they are entitled to recognition when the question is whether, for tax purposes, the property has previously vested, or whether a taxable incident has occurred. The remaining question is whether the receipt by Isabel Bejarano of the community property portion of the trust proceeds constitutes a taxable event within the meaning of C.R.S. '53, 138-4-7. For the statute to be applicable there must have been a gift or grant by decedent to Isabel Bejarano intended to take effect in possession or enjoyment at or after the death of the transferor. It is urged by the Commissioner that the agreement by decedent to participate in the retirement fund plan at Shell Company furnishes the essential act of decedent constituting a gift or grant intended to take effect in possession at the death of the decedent. Considering the nature and character of community property, we must conclude that the property is not subject to tax. The fundamental characteristic of community property is that property acquired during the marriage is as much that of the wife as the husband. De Godey v. Godey, 39 Cal. 157. The system has been described as:    one under which husband and wife become co-owners of property acquired during the marriage by either or both through labor, industry, or skill.