Court Opinion

ID: 4135295
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:00:33.427885+00
Date Added: 2024-06-11T14:34:32.377044
License: Public Domain

Honorable Robert S. Calvert              Opinion NO. c-165
Comptroller of Public Accounts
Capitol Station                          Re:    Proper method of com-
Austin, Texas                                   puting inheritance
                                                taxes where will devises
                                               ,property in fee simple
                                                to named beneficiary  with
                                                remainder over in the
                                                event any of said prop-
                                                erty remains at death
Dear Mr.' Calvert:      :'                      of beneficiary.
             ,~
          You have requested the opinion of this office      on the
above captioned matter.      Gus C. Klemstein died testate.     His
wife survived him..,, Attached to your letter,bf     request is a
copy of the~decedent's,last     will and testament.    The pertinent
provisions    thereof,are  the following paragraphs:
                "It is, our will and desire that the
            survivorof    us, Gus C. Klemstein or
            wife, Mary Klemstein, as the case may
            bej shall have and hold in fee simple
            all of the Estate of every description,
            real , personal or mixed, and whereso-
            ever situated,   which either .or both of
            us may own at the time of~the death of
            the first   of us todie,   and with this
            in mind, I, Gus C. Klemstein do hereby
            give, devise and bequeath in fee simple,
            unto my beloved wife, Mary Klemstein,
            all of my property of every kind and
            character whether real, personal or       '~
            mixed, and wheresoever situated;     and
            I, Mary Klemstein,    do hereby give, de-
            vise and bequeath in fee simple, unto
            my beloved husband, Gus C. Klemstein,
            all of my property of every kind and
            character whether real, personal or
            mixed, and wheresoever situated.

               "In the event any of our Estate re-
            mains on.hand at the time of the death
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 Honorable    Robert     S. Calvert ~ Page 2 (Opinion         No. e-165     )

               of the survivor of us, or when we are
               both deceased, then, in such event, the
               remainder of our Estate, shall then vest
               in fee simple in our beloved niece,
               Lahree Munsch, and with this in mind,
               we hereby give, devise and bequeath in
               fee simple, unto our beloved niece,
               Lahree Munsch, all of our property of
               every kind and character,  whetherreal,
               personal or mixed, and wheresoever situ-
               ated, which we may own or have an inter-
               est in at the time of the death of the
               survivor of us or when we are both de-
               ceased. ”
           You ask whether the rule laid down in Calvert v. Thompson,
  339 S.W.2d 685 (Tex.Civ.App.  1960~,:error ref. )’‘is applicable.
I In the Thompson case, the decedent’s   will contained the follow-
  ing provision:
                   “All of the rest and residue of my
               property,   real, personal and mixed, I
               hereby give, devise and bequeath to
               my beloved wife, Cora Thampson, during
               her lifetime,    with full power to sell
               or otherwise dispose of same, and at
               her death, to my children John W.
               Thompson and Ida May Thompson, flhare
               and share alike,     in fee simple.
            The tax was assessed against the interest       of Cora
 Thompson, and its amount was determined on the basis of the
 value of the entire residuary estate.         The court held that the
 fact that the life tenant was given the power of disposal            did
 not change the estate Into something other than an estate for
 life,,  citing,    among other cases, Wier.;.2Smith,(~;4;~x.a;d(1884);
 gdds .y. Mitchell,     143 Tex. 307, la4 s      d 823
 authorities     cited therein.   This, of course, had long’been the
 established     rule in the jurisprudence    of this state.
             At page 688, the     court    said:

                   “.I?J      The statute,    Art.   7123,l    supra,

     1 Article 7123, presently  carried            as Article 14.08,       Ch. 14,
 Title 122A, 20A, Tax.-Gen.,   V.A.T.S.,            reads as follows:
                   “If     the property    passing   as aforesaid       shall
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        Honorable   Rob,ert S. ,Calvert,   .Page 3 (Opinion   No. c-165   )

                     is plain in~providing    the method for
                     determining:the   value of estates for
                     life .and remainders and any other method
                     of determining such values would violate
                     the statute;    For this reason the most
                     probable future disposition     of the estate
                     by the life tenant would not be a proper
                     item to be considered    in determining the
                     amount of inheritance    taxes due.   . . ."
                 The taxpayer takes,the     position   that the Thompson case
        dealt with a fact situation      in which the will involved clearly
        created a life estate,    and that, therefore,      the instant case
        is distinguishable   therefrom..    We agree.    We think that the
        nature of the estate received by the decedentrs wife is governed
        by McMurray v. Stanl.ey,    The holding in the McMurrax case has
        been ably summarized in the *,case,           supra, at page 826:
                         "In McMurray v. Stanley, 69 Tex. 227,
                     6 S.W. 412, 413, the testatrix;      Mrs.
                     Bagley, devised all of her property to
                     her husband, N. G. Bagley, adding that
                     he should have full power and control
                     over the same to use and dispose of as
                     he might desire,    and in another clause
                     she directed  that if at his death he
                     should have 'any of said property still
                     remaining in his possession    not disposed
                     of or used by him' the same should be
                     given to her mic+es.     The plaintiffs
                     were the nieces'referred    to in the will
                     and sought to r,ecover from the executor,
                     devisees and legatees of the husband,
                     N. G. Bsgley, certain proper,ty that be-
                     longed to the estate of Mrs. Bagley at
                     the time of her death and was not dis-
                    ,posed of by N. G.~Bagley before his

           '   (Contld)
                      be,divided   into two or more estates,   as an
                      estate for years or for life and a remainder,
                      the tax shall be levied on each estate or
                      interest   separately,  according to the value of
                      the same at the death of the decedent.      The value
                      of estates for years, estates for life,     remainders
                      and annuities,    shall be determined by the 'Actuaries
                      Combined Experience Tables,'     at four per cent com-
                      pound interest."
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Honorable   Robert S. Calvert,   Page 4 (Opinion   No. c-165   )

             death, and also the proceeds remaining,
             in the hands of N. G. Bagley at his
             death of certain property of his wife's
             estate that he had sold.     The trial
             court sustained demurrers to the plain-
             tiff's   petition, holding that Mrs.
             Bagley's will vested in her husband
             an absolute title   in fee, and that it
             neither gave to the plaintiff's      any
             right to any part of her estate nor
             affected   It with a trust  In their
             favor,
                 "The Supreme Court in its opinion
            recognized      the rule announced by many
            decisions     that when property Is devised
            generally     or indefinitely,    with full
            power of disposition,        the devise is
            construed to pass a fee, and an attempted
            limitation      over 1s void.    See Trustees
            Presbyterian      Church v. Mlse, 181 Ky.
567j205 S.W. 674, 2 A.L.R. pp. 1237,
            1.240;. 33 Am.Jur. pp. 492, 493, Sec. 29,
            pp. $98-500,      Sets. 36, 37; 3 Page on
            Wills,   pp. 385-388, Sec. 1123. The
            court, however, declined to apply that
            rule   to Mrs. Bagley's will,      believing
            that if it did, the testatrix'         inten-
            tion would be defeated,        and held that
            while N. G. Bagley, the husband, took
            under Mrs. Bagley's will an estate In
            fee in the entire property,        a trust
            would attach for the benefit         of the
            nieces and that they were entitled          to
            receive    ‘all   such property as belonged
            to the estate of Mrs. Bagley at the time
            of her death as was not consumed in its
            use or disposed of by N. G. Bagley be-
            fore his death.'"
         Thus the McMurray case and the many cases that have
followed it stand for the proposition  that the conflict   between
the gift apparently absolute and the gift over of property not
disposed of will not defeat the general intention   as ascertained
by reading the instrument as a whole.   See 28 T.L.R. 125; 17
A.L.R. 2d 76-78, "Anno: Absolute Grant - Purported Limitation.'
         We think the intention  of the decedent     in this case as
manifested from all the provisions   of his will     necessitates the

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        Honorable   Robert S. Calvert,   Page 5 (Opinion   No. c-165   )

        same result as that reached in the McMurrae case.         Since the
        beneficiary   received an estate in fee impressed with a trust,
        the provisions    of Article 14.08 are clearly   inapplicable;   and
        the inheritance    tax must be computed on the full value of the
        property received by the surviving wife.       The nature of the
        estate created must be determined, of course, In each case by
        ascertaining   the intent of the testator   from the will as a
        whole.

                                  SUMMARY
                        Where will creates an estate in fee in
                certain properties     impressed with a trust in
                favor of a third party should any portion of
                the'estate   remain at the death of the first
                beneficiary,   inheritance    taxes should be com-
                puted on the full value of the property re-
                ceived by the first beneficiary      rather than
                under the provisions     of Article  14.08.
                                             Yours very truly,
                                             WAGGONER CARR
                                             Attorney General of Texas

                                             BY

        APPROVED
        OPINION COMMITTEE:
        W. V. Geppert, Chairman
        J. H. Broadhurst
        F. C; Jack Goodman
        Paul Robertson
        Robert Lewis
        APPROVEUFOR THE ATTORNEY
                               GENERAL
        By: Stanton Stone

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