Court Opinion

ID: 4135423
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:02:06.948874+00
Date Added: 2024-06-11T14:34:21.857839
License: Public Domain

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      Honorable Robert S. Calve&           Opinion No. C- 37
      Comptrollerof Public Accounts
      Capitol Station                      Re: Whether shares of stock
    . Austin, Texas                            are subject to lnherl-
                                               tance taxes upon death
                                               of husband where shares
                                               had been Issued to hus-
                                               band and wife as joint
                                               tenants with right of
                                               survlvorshipand had
                                               been purchased by the
                                               husband with the separ-
     Dear   Mr. Calvert:                       ate funds of the wife.
           Your letter requesting the opinion of this office on
     the above captioned matter reads as 'follows:
                  "We desire the opinion of your of-
               fice regarding the Inclusion for ~lnherl-
               tance:tax purposes of stock held in
               joint tenancy with rights of survivor-,
               ship, and not as tenants in common,
               where~~thest,ock,was,purchasedby the
               husband withthe separate funds of his
               wife.
                  "W. L. C. Poetter died testate, a
               resident~ofDeWitt County on December 4,
               1961, and his wife, Mrs. Virginia L.
               Poetter, who quallfled as Independent
               executrlx,/madethe required reports as
               provided in the Inheritancetax law to
               close the estate for Inheritancetax
               purposes.~ Mrs. Poetter's,reportwas
               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
               adsjoint tenants with rights of

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

         survivorshipand not as tenants in
         common, because the stock was omitted
         froniher inherItan& tax report.
           ((Mrs.Poetter has now submittedan
        affidavit to this Departmentsetting
        out the facts wlth respect to the pur-
        chase of this stock and her attorney
        has submitted a memorandumbrief 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 inheritancetax purposes. Both of
        these Instrumentsare enclosedherewith.
           "It appears to us that one-half.the
        value of this stock Is lncludibleIn
        the inheritancetax 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."
     We quote th6 following.excei@'fromMrs. Poetter's ,affi-
davlt:
             "Au‘ing the llfetlms of my husband, ,'~
         Wilb&t C. Poetter, who d&d Decem-
         ber 4, 1961, and for many years prior,
         thereto I maintained a checking ac-
         count 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 ~thisIn order to,keep my
         separate funds apart from any com-
         munity property fund& of my husband
         and myself. No community property
         furidswere ever~placedinto this ac-
                          acccunt was my sole.
         count, and,:.h.ls,
         aa separate property.

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

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

                “From time to time my husband,
             Wllbert C. Poetter, would select varl-
             ous corporations In whS.chI might ln-
             vest 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 ac-
             count 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.teproperty and would be no part
             of his property or estate."
           The memorandum brief submltted In connection with the
     taxpayer's posdt.lonin 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. . . .
                  .Wlththis ln mlnd we feel that the
                  above shares pald for by Mrs. Poetter's
                  separate funds were her separate prop-
                  erty. Please advise us your ruling on
                  this."
               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 survlvorshlvwas sublect to an Inheritancetax when
         received by the survivor at &e decedent'sdeath. The opinion
         consldered~thecase of Davis v. East Texas SaVineS  6cLoan
         Aasoclatlon,      Tex        354 S.W.2d 926 (1962) which held
         that a savlruzaand lokiificate      Durchasedby the husband
         with his se&rate funds an&issued *'hia name,-but subsequently
         reissued to him and his wife as ;lolnttenants with right of
         survivorship,passed at his death to the wife. At page 931
         the Court pointed out that when the"contractwas.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 certificateh&d been
         changed 3y her husb+nd or the deposit wl,thdrawn'beforehis
         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-.,cannotbe diatin&lshed from the case
          we are pr&ay     consld&Lng becauae.lt lhvolveda aavlngs
          and loan certificateand this case lnvo&ves stock. When Mr.
_'        Poetter, acting as agent for his wife, and with her knowledge
          and consent atidisclosed by Mrs. Poettercs affidavit,made
          the contract with the various corporationsfrom which he pur-' '
          chased the stock4 and When thenstock was-issuedby the varlous
          corporatiO;nstd Wilbert C. Poetter and Mrs. Vlrglnla~L.
          Poetter, as joint tenants with I'lghtof survlvorshlpand not
          as tenants inc&nmon", both joint tenants becam vested with
         'a'present,though defeasible, lnterest,lnthe 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 inheritancetax.
                                          . ,
,   .

    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 pur-
         chase 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 sep-
         arate 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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