Court Opinion

ID: 4141333
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:09:32.27603+00
Date Added: 2024-06-11T14:23:12.927230
License: Public Domain

OFFICE   OF   THE   ATTORNEY   GENERAL    OF TEXAS

                                            , dated Sbeembea 4,
                                             •~mi=rice th0 r0ii0u-

                                             rs, Q\y 8uapter aad
                                       aa lrrevoaable tvwt 00 the -

                                                t0r tveatpflve
                                                derth OS 8ll per-
                                                rdaate the trust

                        the 1930 of the donors, ‘or the rurviror
                        y the topa OS the trust,     laoo~;a there-
                      to rwh donor or doaorr.       Ia the ereat
that  both Ooaorr died prlw to the termlaatfoa o? the tmaot,
lncoau therefrom ~8s to be distrlbutod       in sevoa sharer to l
aamed llaesl dercendont of the doaorr and la oae shere laoh
to alae aaaed coll8tor81   deroeadaate,     vlth tho provlro th8t
the death of w amod beaefloiory         vltheut a surviving ohlld
or children vould, vith on lmm8torhl exooptioa,        rerult  in
the  dlvlsloa of owh boaoilolAr~‘o      ohare among tbo rurvlving
Ronorable George 8. 8hepplfd. page 2

beaefloUrle8,    vhlle the death of 8117named beaeflolar       rith
l survlvlng ohlld TV ohlldren vould, vlth-ra -tori J ex-
oeptlaa, test such banoflol~~g~        share l.n the @ur+l~Uq
0hllA or ehlldren,     A further    provlaioa of the trust ladsa-
two e      orpllolt   the lntentl@n    of tha doaors that only the
Mned bansilolules      or their survlvlq      shlldrea should shwe
ln the brneflts of th6 trust.
            ( 0)    th elxplr6tloa of the tern of the trust
               Up c m
6nd subjeot to the oontlageaof noted la (a) above, 6evoa
shares oi ths oorpss vere to be dlrtributed to thr aamsd
lineal desosndant and 0~4 equal shsre vas to go to saoh Of                       .
the rarvlving amned ooLlatera1 desoeadants or tholr 8urviv-
fag ahildrea.
          (d) Ro benrfloi~~ rho should oonfest or se& to
ret ml64 tirquuxul tha tru8t iastrumat  vas to s&r8 in the
%aam or oorpus efthor as 4 beaetlolary of the trust   or, ua-
dar the oontiageao~ aotod la (a) above, ae aa heir of the
donors.
                At ths: time OS the oreatlm of the trust, the doaor,
Ouy      Bumpter,  vas slstg-asron. years OIJJm+had aAlgo_rxpeot-
ana       of ten    fears   under   the   Amerlosa Rxperlonoe   llortalit~
TabI as, vhile ths donor, Ilannlo bumpter, vas sixty-orar rears
old ax& h6d an expeot6aof~ of approxlnately thl.Heea and me-
lnu gears* Mr. &mpter died in 1930 at the 8ge of seventy-
sir, snd his vife died in 1942 at the age of eighty-tvo.
                   lether
           Yo ua r k        or not ve should iaolude PI.
llamie 8umpter~s one-half  oommunlty Interest ln thb  tru8t
66 a portion of her ortato, Sop inhorltanor tu purp0ses."
          The rolevent portlons of our lzbrltence                    tax stat-
ute (Art1010 7ll7, V. A. 0. 8.) we 88 follovst
                *All property vlthln ths jurisdiotlm      of tkir
          Bt4t0,  real or persoaal,   ocrporatr or laoorporate;
          aad w lnterest     therein.  . . . vhlch shall pass
          absolute1    or in trurt by vlll . , . or b
            aat. sa ie. or gift aado or Intended,T-f&+-
                                                     o
            ot in Dossessioa or oafomeat oftor the de8th of
          The grantor Or rlorrar, &all, upon pusslag t
          r    the      of any peron    oorporatlan, or EL
          o&m,%         subjoot to ? cu. . .g (Barhrr-        0-1
                                                                  . -.
                                                                         8

Honorable Oeorgo 8. Sheppard, pap4 3

           Our prlnolpol questloa is uhether the Anat&    truet
vns ‘msde or lntuuhd to take    atfeat In posso8sloa oz enJoy-
stsat Uter  the death of the grantor (a) or doaor(m).”
          This o&use has but saldon ban ooaotrued ix our
oourts, and, although ldeatioal   olauses la the laws di othor
at&or have b een  th elubjeot  OS muehju4iOUl   btorpat8tlan;
ve have found no Fartanoo la Web m rppellate      oowt    irr uy
jurlsdiotioa hen ooasidered the appliaetlon of this    o&me
to a trust possrsalag the prooise obaracteristias    of the
Sumpter      trust.

          The ooarts  of this aad other states have oomist-
entlr held that lnherltsn00 tsZ08 sro tUe8 On the l  r   t OS
eUCQ*s6mln  to  th e rrty involved.     Mate v. Rogg %
Tsz. 568, 72 8. Y. p26
                     ”“9 593 (1934).  As van said b tustlo
Blair in the lead&@ ease of &the8 v* Sheppard, 113 8.Y. 12d 1
997 (1940) (error refused)t
          .      *UC do not rtgard as naaeasary a lengthy Us-
          ousslon of the distlnctlcn     rcaogalred by the au-
          thorities   betveen the rederal estate tax and the
          hheritmae     ar suooesslon tax levied by the vsrlous
          statos.    Suffloc it to say that the federal estate
          tax 18 imposed upon the right or grsatar or traas-
          tsrar to trmsrer prapertp, mid that the lnhtrlb-
          aaot or r!xaceslon    tax by the Stete la imposed up-
          on f&i rlFnt to receive or scmoed to the DO~SBS-
          ~101302 enjomnt      of property. . . .    (mphasl8
          added)
Thus an&r OUPstatute the right to receive or errowed to the
poasesslon or eojayment of Frqerty  1s tsxeblt both rhea  au&
poaso8slan or enjo~ywmt lo rebeivcd under a tranarer %ada”
to tsks eiisot after the death OS the doam and vhea su&
porsessloa or sajoymeat Zo received uadsr a trmasier ‘lateacb
cd” to have such efteat.
            That the vords “mado” end “lat60dsdm, as used ln
Article 7ll7, do not la all oases denote the aam tqe of
 transfer la cltar.    Uhlle most if not all transfers   made”
 to take efftat   after the Qath of the grantor are 'intended'
.to have such aa effect,   not all transfers “latoaded”  to have
 this eftect tart “m&do* in rwh a vay 88 to looampllsh it.     Be-
 eardless  of vhether both elements are     oseat ln a given true
 fer or whether the elmeat of latent 6iTone la proselat, the
Honarable George B. Bbrppard, page      4

right to reoolvo the p08808810n 0r eajoynsnt o? property under
8uca a tranmfer is taxable.            Traasfers of tba formor type uo
luo h that th emud y      maessullg take l?foot a ?tuth e        -8tho f
ths pultor,     ss vhoro    A rosuves a llie ortats in prmx
trantferred    by vag of remUader to B, or, 88 io the ktbu
gag,88      ran ,ohere A povldes thst property la to bs oo~r*egea
        ifagt pars af’ter Ata dsath.          Xnlwihmoea th etraaofor
Is“ma de”    Insuo h   a ra g  that    yfossessloa a ndenj nt c a n
anlg pm8 upoa the 648th o? thy grantor             08 at sY lms btu-
brined by bin death.       on ib othu haad, tranafus         of the lab
ter type 8re thoot ulalchtha grnator %toads' to tak8 of-
iaot aStor his doath, but vhioh pray not aeoe8aerll.y do 80,
as vhero A, bellovSag that hs olmaot live more than ten gou8,
reserver an estate for tuelrrcgosrPasridtrnna?srs the remainder
to 5. Xuo the l&ant to postpow the vest                   o? posaesslon
u8dtnjogmentinB          Pntllsfter the death ofF%e grantor Islp
pnront, but, mUIce the preoeblng litustlOn, tbo trsasfer la
not ‘epde” ia such a wag that tQe iattnded result must nsoee-
sarll~ iollov,     slaco A’o uaoxpeotrd longevlt;l oonoelvablg
00~14 thuart his Intent.            Both types o? tranaiorare trstazicnt-
uy ‘ia ohara&tw, and, l? olausoa of the type wider eonaldcra-
tloa are to ?ul?lll       their purpose a? preventlag lntu vlvos
traneaotloas vlclsh are testamentary in ohsraotor ?ras be*
uaod as vshisles for tar evasion, both typaa o? transfsr must
be, ae they vere, lnoluded vlthia tha tax statute. As was
sud by BP. Justioo Lamar S.a )iesnay vr Rev York, 222 0.8, 525,
536, la ooastrulng an almost ldentloal proviaioa            In the gev
York TraanSerTaz SAV:
           lXt l.mpoaesa ta xc mtransfer0 b ydesoeat, or
     ~111, vhioh ta kl  ??eot at the death OS tha kstat-
                        e
     or4 and thea a tu upon trans?ers made ia oontum-
     plation of dsath.   It van but logical to taks the
     aext step, and tax trensters intended to take et-
     toot at or attsr t&s daath 0r the grantor - lvsa
     though that svsnt vam aot aotually impsadiag vhan
     the deed vae sigued. . . .”
            ft vi11 be AOtiOed    Attsr the Orestl0a 0f the
                                 that
bumpter trust the doaors theroof Ye    still possesud of tvo
lnterosts la the trust propertgr (17 Aa iatarost in the ln-
oolu of the trust measured by the lives of ths donor8 o8 by a
period ot tvmtg-Sloe gtmrs, vhlohever proved to be shortor,
aad (2) a reverrlonary intuost  oontlngaat upoa the deaorr,
or either 02 them, surviviag, burlug the tomb or the trust,
all or those panad bemiflolarlesand their ohildvenwho did
Eomrabk    Ooorge 8. Smppard,      mr    5

not oontort the trwt   ixlstruaent.Coupled vlth th68e r68orw+
tloa8 18 the faot that thlr trwt   vw oreated at a time vhen
th e lo ng elxpeoktlon
             rt          of life pOr86886d by.either of the
dOnOr Va8 but 8l&htlJ MOP* than hAlf the term Of the trU8t.
            b V88 88ld in h 80 CO&U46’8 E8t8t8, 190 !f,Y.
8upp. 895, 902 (1921), vlth roferrnoe to the tm 0r ohm3
hez!. under  ~ooMld6rrtloar
            'Sa6h 0686 nurt ba deterlnined br it8 ovn peou-
     liar iaota.    The am or the lav 18 to reeoh propertr,
     vherv by reasonable daduotlan the donor intended to
     r-Ot8in it8 6njOmt    se
& 8~41~18 o? the 8unpter tru8t reve618, ve f681, that             under
 the teX'm8 Of th6 trU8t and the OlrOuWt6nOe8 Of its SarPlotlon,
it 1s Olwrly oopprehend6d Vlthh th6 olauro Wider OoL%8lder6-
 tion.     While th6 trot that th6 term 0r the trwt tx06ed8 the
 life eqmotanofts       OS th6 donor6 might not if 8tandlng olon6,
be 8UffiOtit        to ju8tiiT thl8 o~olueio~    (~66 Shukert   V. tilen,
 273 U.S. 545, 47 Sup. Ct. 461) th18 fact may VOU.          be ooupled
'vlth Other OlrOISU8tanc68lndlcurtlng that tih6 donor8 did not
 intend to r ella q th      u he hir
                                   lnjopent 0r the proport until
 th8i.F d6ath8. BUS iS th6 OA888bf b FC bOht!iidbpp, 236 8.x.
 2778 140 I. IL 697 (1923), Md 8t8rk Y* United Btrter,~ 14 P.
 (2dj 616 (l926)       ln~olving th6 8aa6 trust    t&et faot that a
 donor lwd 8i&riV~           oreated 8 trWt to iIl8t fOl' e&ht 76tQS
Va8 added t0 th8 irOt8 th8t h6 r68Ol'VCd 6 Iif8         ilktere8t In the
 lnaam durlag the Ilfe of the truot anA reasrved oertaln poverr
 of alteratlan and aodltlortloa        to obtain the 06smlw1on t&t
 the   truuier     nr  intended to take 6ff6Ot in go886881on av 6n-
 joymsnt l     tar th e dakor% death.
            h    the iWtMt    tZ’U8t the dONF8   1ikdV188  re86rV8d
M   bterert    izr the iDaOBi8 rOF 80 lOng 88 they 8hould 11V6 dur-
      the terr af the trust.      Rad th.j r688rt6d M uallmltad
    6 d8tdte, the tr&Or        0166~17 vould hW0 been taxable,
&thea 1. 8heppard, rapra, 49 A.L,R. 874, 878.           A om8ldera-
tloa of thlr r68ervatlon and th6 brief llfo 6           OtMof or the
dOnOr 6811odly reV6al th& by ?688Wing M 68           T at6 se 80 IOn&
88 th8J should 1iV6 during th8 tV6nty-f&V6 Jcul6~Of th6 tHl8t,
ther in faot,     if not in Mae, rerrrved an ualSmlt6d life l8-
t4t6.    To treat thl8 rerer+Btlon other than a6 if it vere an
-ted        life 88t8t6 18 t0 OOtlO881.8Ub8tMO8 Vith fOrrp. ti
neither,the 8ohmldla       aor the 8tuk oara, 8upm, va8 the re-
mote pO88ibllitJ     Of 88 donor rurrirl~g     the ter8 of the trwt
Honar~blaOeorge a. bhspprrd, page 6

allared            to     milit8te
                                l@lUt                      th6       OOnOh8~OIl           Of      th8   OOUPt8 bl-
tbO~&            thb       w      \DlbPt     V88      8tWIUOwlJ                Urged by           OOUDIOi~   if
                                  ltr vero to be @v6n oontrolllng lifeot M
                                   relievel trust hOa tUAtlOa -- 68 it & th6
b.StMt   trLUt   th6  r6IDOt6       pO88lbillty     Of th6   dOW8 uiring
10nger than    tvontprlv6        rear6 tpam the oreatlm oi the trurt
vere alloved to r-ova          thlr      trust from the %ade or %xbnded
to take eifeot after       bath'         oluue   --  an uaegurlle4  lwphole
r0r tu             8Va8hAvould b6 oreatbd, rcn ewh anAevery trwt                                                          ln
vhloh        a     Ufe          ertatr     II88    rererved  donor oould be can-
                                                                       to     the
&red         tu          lmwne         by the 8Lmgle eXpedi6nt Of UPtlt%Jh& 8Wh                                          e8-
tat8      UpOn 6 t6rm                  lO&tgeP thur           th6     6XwCtmOy              Of     th6    donor.

                         Moreover,         ia      8ddltlonto t&c&r iotorert ln th6 In-
0~~0,        the donor8 0r                 the     BPmptrr           trurt          retained   8 rer6rrlonary
int6rWt                 oOSItbg6nt         UPOJJ thbb’             8UWiVing,             during tb tO=                   Of
the trust,                those anmed bMOfiOiUi68 and their uhlldronrho
vcr6 entitled to t&6 Under the tCU6t.     Th6 oalr pX’OY181Oll                                                            SOr
the death   0s ths named bon6rioieri68 and tblr   ehlldrea 18
oontained in 8OOtiW ml Of the tru8t iIldeSltUZ'6   PI fOllOV88

                                 all b6n6flolcries
                         'If at uay
                           tins                    entitled
          to      hereunder &hall have d6Oerred, Or have
                   take
          ceased to b6 lILtltlrd  t  th6 b6IWflt8 h6reOf   by
          Wt6,            &Id     IIf%bP     p8pIMt           Of     al1      OOlt8,      6X-68             Md
          ohrr~ea thereof, the Trrutee 8hall dlrtrlbute th6
          property 0s th6 Trwt ?ud One-haltto the rerpoo-
          tloe hV~U1  h6ti8 0s laah of t&6 donOr8, per
          8tlrpe8 in POOOrdMW 171th th8 8tatUt68 Of th6
          Nate            of     4-8       vlth referrace                    to Oemoent           M      Dlo-
          trlbutlon.                   . . .’       (papha                  added)

It ir pl8ln that in 8p66kliu M *allben6floiuliea   6ntltlad to
t&6 hereund6r" thl8 8aOtiOn iaO1udSS th6 dOWr8, thur U&i=
prorl8lon only ror the death or the nnm6db6MtflOiAPlO8, their
ohlldren, Md t&6 dOnOr FlOr t0 th6 t6rPiPotiOlr Of the’trWt,
and m8khgT provl8lan for the death 0s the beaefloimler        and
their children 8UPY1Y6d by ma 0s both of tha dOBW8. Although
the term ‘beMfiOl~i88”   18 novhere deflned in the trwt    in-
8trmumt,                 th6 donora do, in faot,                            8here 6a b6a6ilol8rler                       under
the trU8t                through their r886FtatlOiI                           O? 8Xl blt62’88t   in              inO-.
In addition, the tru8t iartrument                                           olearly       lxuUoate8 their
rtatw a8 benefiOirrle8   by tVi66                                      8      6kw         Of ‘6Iiy ruoh Or&i-
I@       beneiloiery                   (eXobpt      the      dOnOr           a.   .    .’   EAd iLOt th6 pUti
to     th6       trwt           inrtrWMt            OOnrtdWOd th6                     donor8 68 bUbIbfiOibmJ8~
PuaorbleOeorge               H. 8b.epprd,Pge 7

th6 parenth6tloal lo r p tlo0snthe dOnOr rrm th6 800pe of
rash tom obvlourly vould have been tmaeo688arf~      lIoreo6er,
lnthe 6YMt    Of the OOnt~O~oOIltained       in &Otimm,         the
trwt tombate      amI th8 propert;  goer to the  ?rermotlre
utr ulhdrr    0s lAah of the doa0r8.m   bin66 lt 18 l r mii~
lllillthBt a0 liY*                    mr8oo.      pO886#8ta  he%l’8,         thi8    hOtiOn
016~1~ inO1odr8    the                death8      Of th   dOnor in           th6 O~t&l&eMy
therda         rated.
                   Conreq\untly,         there 18 no provlrl6a
                                                     ln the in8truwmt
for      the
        bt8          oritlon      0s    th6      rhould either 0s th6
                                                 trust   prop6rty
donor8 8WY   Pye thO86 nam6d bcn6fiOiari60 and their ohlldren
vho hav6 not canterted th6 trust.       In the event Of mucha can-
ta6Mr,      thlr UIldirpo88d Of pOrtiOn VOllht!revert baok t0 th6
donorI, R68titemlAt Of %%l8t8, hotion        430, QIld, it be-
zmpoa8lble to loocuapli8h the purposes 0s the trust aad there
being   no addltloarrl m8&&8    vho oould po86iblJ haY6 m in-
teredi in tho trurt, the dfxm8 vould t&6 by raverrlon an
absolute   and UKl6IlOWb6rbd intor6St  in th6 t?USti pWp@Ftg, R6-
8tat6WSlt   0s !kU9t8, 8eotlona 335, 339, and vould regain tha
vhole Of 8uCh proport?.
                   x13 the     cast    0s   In    PO Pratg6*8       will,(lg30)        201     WIO.
636, 231 El. U, 271, the oourt 8rld:
                "The test to be applied, in order to deter-
          mixi vhethbr or not a tran6tar va8 intended to t6k6
          effeot in poa86sslon  or enjoymPont at or 8rtOr ru0h
          death, is vhether th6 donor reaervod to hlm6elf any
          beI&6f~OiSl        or   6~X103hlO       iIIt6r6EtB    Or my        right    tb6rO-
          after to othervise dl8pow 0s any ouch interort ln
          thy oorpua 0s the trust, rg the b8nerit 0s blmwlf
          or othervise. . . .'
            V6 f66i that t&6 ~UIiIptOrtrU6t ffIli8 V611   Vithb SUch
 a t68t, and you El'6 reQ?eOtttily adviasd that     8UCh tPU8t W&S,
 in th6 hu.kgwUgS Of fWtifJl6 7117,  *raed6 ,Or l&ended t0 t&6  6f-
 gO;grpp8686iOn      or enjoynut    after th6 death 0s the grantor
               .

            Thl8  CO?.lO1U81Qll vould aUttWati.Call~ determine   tJ.16
 tbxablllty   OS the trurt Vere it not for a CCZlt6lltiOll    nta! by
 the 8ZtOWEty for the 68tatW         In 1921, the date 0s Orention
 GS the trust, lnherlt6nO6 taxfm v6r6 lovled oaly upon strsngar6
 6nd oollaterel   descendant6 of' the grantor, vlth llnral boaemS-
 at8 bolng 6xp1’688fy exempted from 8UCh t8X68. 13 hU5261’8
Honorable George Ii.8&ppard,                       pago 8

uV8      496.       Slnoe a portion           ai   the      lnoaneand OOv8           or the
trust     18    to   go   to   a   daughter        ooztte&d
                                                   0s tha     dOIbOr8,it     18
tbet  ear tax lmpoaod upon 8uoh an int6rest vould be retro-
lotlve and unocmatltutl~l~     Uith thi8 00ntentI0Ki V6 Obllnot
agree.

                a8 h8          b86n 8hOVlIabove, OUC              tOX   18 m      th0   right
t0 receive          or $uooeed t0 the p08U688lOn Or 8njOmnt                          Or prop-
crtmferred      in a mode uiade or intended to teke erteot
ester ta death 0s the grantor.   A8 VW meld in the Retheo
0488,     8UJU’rr

               'It i8 IlOt A qUS8tiOn Of Vhen the b6n6flOlA~
         ht6PO8t I8 oreeted,     but th8 t8I 1s *Orad     Upa
         the rl&at to receive la posreorlon    or enjoymeat
         after the death Of @'a&Or Ol' 86ttlOr.       ti 00M6-
         ~uenoe, a grantor or rettlor may oraetc an lr-
         reYooab~6 truet dwlng hlir llfetm,      still   it h6
         pO8t W8 the rl&t       of po88688ion or en oymat of
         z    keflclo~p    until after the grantor i s daath,
                     OpotJ      OF onf   intWO8t            therein     18 8UbjeOt
         to    tElnherltenoe 01, suoo688lon tax at Or aStar
         hi8 death.    Under our atetute, vh6re either ‘piis-
         ses8lon~ or 'enjoyment' io nede oontlngent upon
         th6 death 0s grantor or 8ettlOr 0s 011 or any gart
         of ths trurt   estate, euoh transfer 16 taxabls.
             Th8t the ~p088688lo.n"     and 'enjogmeat' vhloh *co ds-
t8rrPirratiY6Of thi8 qU6AtiORrefsr t0 the 600~0                bp%;60f
th6 property rather than        to the theoretlonl   vtt8t
i8 rW6016d by the hO8t Of Ctt661B         866 49 A* L. Ra 4, 878, 67
A. L. R. l250, 100 A. L. R. 1246, 1247, in vhluh a grantor ha8
r886rYbd a life       e&At6  in property tr6nrforrsd by vap 0s r6-
aralnder to a ~Mt46.         Ia the86 08066 the grantee la q ulr e8
lQn6dibt6ly M LPdet608Iblg Y68ted remainder Uder th6OrStIClil
oommon lav rulea,       and, vere the &he of veetlng the oruolal
date, hi8 tar lloblllty        8hOtid be deter-d      at thet tinta.
Yet the COB08ore YlrtuaUy umnlmouo ln holding that the d8te
vhhenth8 @6Ilt66 SUOO66d8 t0 the OOtU6l pO8808816l.i end enJOy-
;;;t$ither         than the date vhen he acqulree 0 YerrtGdtltla,       IO
              Judge Blolr echoed tha sfum IGee In th6 Both66 0860
b reje&iag         the data Of the areA%Ion of t!E int62e8t a&
p% cing smphaalr on the date vhm edtuel poasatsion cud BIL-
 jopent are 80 ulred.         in saltoPotal1 Y. salt0n&all,       276 U.S.
260    271 (1927f     the then ar.   Jwtloo 8tOIi6, speakillg    r0r a
 UMhUIOU8     oourt; 6XpX'esred the IBAtter    thus:
Ronorablo Ooorgo H. Sheppard, pago 9

             ‘So 1       as tho prlvilego of ruaao88loa. ha8
      aot   beea   Sul
                    y ouralsod
                    Y             It MJ bo roaahod bT the
      tu.    (oitinir oalO$)   Aad la dotor
      it ha8 be8a 80 ourraised    toahaloa3 --fA%zr
                                               dirt                .
      botuooa vo8tod rorladorr      8ad othwdZpmtr    00
      of 11tt10 wall,        for   tha rhiftlna      ho worralg
      bsrufltr and burdoor of rsornrty. vhlah U           Wq
     8ubbleOt Oi e 8U43~0881OIA tar, IruT lVOA in the OIDO
     Of a VO8t.d ro~iader    bo rortrictod   Or 8U8pdAdod
     br Other lo@    dOV1008 ,’    (St@Urlr  8dded)

             ti t& iAdUlt trU8t the hlkOftOiU'iO8           UOdOUbtOdlJ
aoqulred 8llilltOrO8t which pO88e88Od0 Oert8b d.~OO               Of VOltOd-
M88    in 1921,   ;Jet It VP8 Rot Ultil     1942, VhOa both dOKkOr8 VW8
doOo88od, th8t they 08me to enjoy Uiy Gf the ooanOml0 b8Mfit8
0r th0 prop8rtj.       Sines the tax Is, a8 ve have IOOA, roielg
UpOn the priVueg0        Of rOOeiVbg    8uOh kCMfit8, 90 Q8A OAly
aonolude that tax llabllltf         of the trust 18 to bo deterniaed
ln 1942, a dat8 when both linool and oo~tora~              dO8OOlMhlt8
vore subject to the tax. Xi0 quertion          of retroattlvlt~    l8 in-
volved for the taxable OV8Sltoocurred 8Ub8eiJUO& to the rdop-
tlon of the applloablo 8tatUte;         neither OUC OOnrtitutiOr&
prohlbltlon     8gIlin8t rotro8otlvo    laV8 nor the due $Il’OOOS8
olaurrea of our State and Federal Constltutionrt is violated.
SthltOMtAll 0. &3ltOll8tall,        8U&IM.

          In rewhlAg tbi8 00no1u8lOA, VO are aot umvaro of
tho came or Coolidge v. &A& 282 IL & 562 (1931), la rhiah
th8 Suprome Court  of the Ihltod States           held invalid aa at-
tempt by the State  of Iba88aChUSett8to
                                      employ ALA%nbarit8AOo
tax rtatute emoted in 1921 to tax the roaolpt by the boAa-
riOi8riO8 in 1925 of the aOtue1 por8srrlon8nd enjo-?&   of
property the benafiolal i&tore&s to rrhlohvero oreatod by 8
trust oxoouted ln 1907. IfYOla a o p thl8to daa8o, IIO would
be forood to oonoluda that the lntorort la tha bumptap trust
glo$ppfed    to a lineal de8aeAdaAt OS the doaorr voold not
                   Hovevor, vo 08~
                                 aoaept nolthor tho roaronlng     oi
th8 COO&3     O&I)* liOF it8  QFO#eUt ~UthOI'ltatlVOUO88.     %%O
deolrlan IA the Coolidge Qalie fouml tho court divided iit0
t0 fOUP Vith  h8tiOO8    3iOhO8,  Br8ndei8, ti      StOAO jOw     fi.
Justlos Roberto in a jk9I’~lUB8iVO di88t3nt baarodUpOlI the pl'ea-
18er vhlch to have onunolated above.      Althou& th8 Coolfdgo
CQle h s 8
         MVer   b een  lXpre88ly overruled, th8 SUpOS COtrrt
has, ln a later case (Yolch V. Henry, 305 U. 8. l34 (1938)),
held thet rotroaotlvity     of a tax alone doea not make for AA-
oanstitutiow3llty,    and it 10 notrvorthy that iA this -80   the

                         i
lionorablo   Coorgo H. Sheppard, pace 10

COIU?t;8N"kinrr t&O-     th0 thOA &. Jurtloo btOA0, in dir-
tingul8hlAg tho Coolldgr Ga80 from the rlturtlon thera lavolvod,
oarofull     rofraiaod    irom qgmvlag          rush       ouo     mU 8poko‘lxutead,
at pqo       47, oi tho faat8 ln th8t aa   Iwing ‘the
80 arbltru~      and 0 prO88iVO 88 to bo 8 doalal d5%028.m
(-18         added)  &0 ON My           UOO        Of th0         gmvii7   0-i bz8-
rO@Pding      w dWi8iOa   Of the       8UpOEW       6OUPt         FloS   t0 it8  foTM1
ovorrtiing,  yet v8 .UnaOt but         feel      that      the    di88ontlagOpiniOIi
in tho Coolldgo ca80 18 1~x0 ln harmony vlth the iAtorprot8-
tloao vhloh hW8 boon plaoed uparr OW inher;t4IWo tU 8ktUtO
uxd 18 mom reprooontatlvo  of the recent tu  deolofonr   of that
OOUSt thUI     18 th0    OpmOa   Or   the     888jOrity.

            hA8OQUOAtl~,the quoation   oontalaed ti m‘our OpiRiIka
roquobt 18 mnvorod in tho riiil’Mt~V0, 8ad YOU m@ re8~oOt-
fully 8dvl8od that MM. SUmptoP' oatlre One-half UoPmUXiity
Lateroot $.n tho 8uaptar trpC(t should be included a8 e portion
ot h,er ortate r0r lnhorltanae tax purposor.
          w6 8rO return      herevith             the file         vhhh 8aam-
panled your oplnlon roquolit.
                                                           Very    truly your8
                                                 ATTORIGY
                                                        GEIiiRALOF TXXAS

                                                                  R. Doan Xoorhoad
                                                                          A8Ui.8tmt