. .
EATJI-BRNEY GENERAL
OF TEXAS
AUSTIN 11. .rJcuAs
PRICE DANIEL
ATTORNEYGENERAL
February 12, 1949.
Hon. Robert 2. Calvert Opinion Ho. V-769.
Co troller of Public Acoounts
has$ in, Texas ROI Bxistonce ana re-
lease of lnherltanoo
tax lien w&r ‘sub-
mitted facto.
Dear Sir8
You have requested the opinion of the Attor-'
,ney General as to questions raised by &.. Jack W. Frost,
Independent Executor of the Estate of tied W. Frost,
deceased. The Saets Sormi the basis of the &CIOU-~~
torte questions are stated 7 n his letter whloh you have
attached to your request together with a oopy of a War-
ranty Deed from the Estate of L. J. Hart, deoeased, to
Frecl W. Frost; said Warranty Deed Is dated February 10,
1939 and signed by Katherine Hart Edson, Independent
Executrix of the Dstate of L. J. Dart.
We quote from Mr. Jack W. Frost’s letter:
“Prior to his death, L. J. liert~ouned
a part of Lots Nos. 4 and 3 in Blook Ilo. 1,
new City Blook 401, within the oorporate
limits of the City of San Antonio. . . .
“Mr. HaFt died on July 8, 1938, teatate;,:
. . . .
“His will gives ~a11 hla property of
whatever kind an8 oharaoter to his daughter
Katharine Hart Edson, and appolnte ho* III-
depentinti BxecutrZxm:
”
. . .
“Theinvent0 in t+e Estate of L. J.
&art was ,filed on‘3uly 3, ,193P. . . . Amon6
,. . Hon. Robert S. Calvert, Page 2 (V-769)
i .
others, it lists the property in question
at a value of $7,000.00; and the total val-
ue of all property is listed as $625,241.35.
fi’hhelist of claims filed, a part of the in-
ventory, lists two notes to Fred W. Frost,
‘C
one for $21,205.54 and one for $4,170.90.
,
“Subsequently, . . . the County Judge
. entered his order whfch was approved
iy’the State Comptroller, fixing the inher-
ltanoe tax on thie Estate. This order . .
shows an appraised market value of $32,-
999.20, a statutory exemption of $25,000.00
anti a net taxable value of $7,999.20. The
tsx Slxed Is $79.99. . . . It Will be ae-
eumed, that it has not been paid.
“Under’date of February 10, 1959,
Katherine Rart Edson conve ed oertain prop-
erties IA the City of San in tonlo to Fred
W. Frost, among whioh te en undivided one-
half interest in a part of Lots ~4 and 5 in
said new’city Block 401 particularly de-
aorlbed In said Deed. $he Deed reoltes
‘Ten Dollars and other valuable oonsldera-
tion’ paid by Fred W. Frost andthe aanoel-
lation and delivery to said E&ate by Fred
W. Frost of a note for $16,000.00, exeouted
by L. J. Rart. . . . My files indioate that
the interest on this note was delinquent
and that the former note to which referenoe
is made in the inventory was probably made
for delinquent Interest. The conveyance was
obviously made in oanoellatlon of one of
the items of indebtedness as listed in the
inventory ltnd list of olaims.
,I
. . .
“I have maae the Inheritanoe Tax Re-
turnsin the Estate of Fred W. Frost and
have paid the full amount of the fnherit-
anoe tax due, . , . The unaivided one-half
aterest in the lots mentioned above wa8
Listed in the inventory and in the Inherit-
¬) Tax Return.
.%A. Robert 8. Calvert, Page 3 ,(V-769)
"I have sold this undivided one-half
interest to Mr, Terre11 Bartlett, . '. . and
his attorney has made a requirement that
the appsrent inheritance tax lien against
the Estate of L. J. Hart, deceased, be re-
leased.
Mr. Frost then states that he Is OS the opin-
~lon 'that the Executor of the L. J. Hart Estate has the
right to transfer and convey this property in settle-
ment of debts of the Estate and that, therefore, any ap-
parent lien should be released by the Comptroller. IS
this were not so, no Estate, regardless of siee, whio$
had more debts than cash on hand, ooul'd ever be sold.
Article 7133, V. 0. S., provides for a lien‘
,,pl;gti the payment OS inheritance taxes and reads aa
"A llen~shall. exist on all property
subjeat to taxation under tNs law to se-
&me the payment of all taxes, penalties
and costs provided for in this chapter.
All persons acquiring any portlon of said
property shall be oharged 'with notiae of
the existeiioe of all Waoh unpald,texee,
penalties and Qosts, and of the lien Be-
curing their payment, whioh may be en-
forced In’any suit brought for the oollsg-,
tion of said taxes, penalt$.ep &Ad oosts.
Article 7l31, V. 0. s., presorIbes.the method
o? Slxlng the tax, provides that notiae of the deter-
mination of the amount of the tax shall be given to the
executor, administrator or ~truetee, and %o the person
to whom or Sor whosa uee’the property paeses, and Sur-
‘,thee* provides that said tax ehall be a lien USIA sy3h
property from thq death of the deoedent until paid.
AI-Mole 7l34, v. 0. 9 ., provides for Soreolo-
sure of said lien."';,
Inhelritanoe taxes beinS “privilege taxes”
levied upon the rlghh of suoosssion to propert
decedent, State ‘0. et.123 T. 568, 72 !f. (2d ;;S:
,~
i
Ron. Robert S. Cal.vert, PRge 4 (V-769)
a Sortlori some benefloial interest of the deoedent must
be sucoeeded to before any tax can aoorue. lfevertheleslr,
the lien provided by Article 7133 Is not epeclfloally
limited to the property which is eventually
The Supreme .Court of WRShiAgtoA hae held that
the state’s lien for payment OS lnherltano,e taxe8 wa#
not lost on realty sold by an eXeOUtOr to pay tku e+
pensRes OS administration and'ala a against the brtatr.
IA e Kearreas~s Estate, 61 Pao. 26) 998. Thm Wamhlng~
ton statute la similar In maxg reepeots to our statute,
poviaing in part ae sollow8r
"All property . . . whloh ahall pas8
by will . . . shall be subjeot to a tax am
provided . . . after payment of all debts
;u&y the deoedent at the time of hla
The inh6wltanoe tax ahall be
and reiain’a lien on suah estate flrom the
death of the decedent until paid.
The Washington etatute had be A oonstrued (as has our
rtatute, State v* Hou& eupra 9 as being a tU
Eight a? suooessl.on rather than en estate tax,
orbin's Estate, 107 Wash, 424, 181 Pao. 910;
was contentlea that since the tex was only upon proper-
ty pass1 to benefioiaries, the lien of the tax w&s
likewise Y! imlted. The oourt ~8.8 of the’ opinion that
this oonoluslon was prealuaed by the reasbnl iA In
d’s Estate, 122 Wash; 648, 211 P. ?I 7 4, wgoh
estate tti was not a aeauotlble
expense beoause the statute did not speaiflcally make
it so. This result, said the court, was based on the
power of the Legislature to declare, for purposes of
the tax, what shall be deemed to have been reoeived by
those ruooeedlng to the property, and to require the
loooessor to pay a tax on that part whioh was never re-
celved but was devoted to other uses. The oourt said:
"liow if the Legislature may require,
am a oondltiOn to the Bucaesslon, that
the beneficiaries .pay a tax on that por-
Ron. Robert S. Calvert, Page 5 (V-769)
tion of the estate which does not pass
but is consumed by chargeable expense, it
may, upon the same consideration, provide
that; notwithstanding the allowance of
certain deductible expenses in the oompu-
tation of the tex, the amount of the taX
when ascertained shal$ be a lien on the
whole of the estate. .~
The oourYthen wadded that there.was n0 question in view
., of the plain language of the 8tdXte above quoted that
the Legislature had declared the lien to eXi8t upon the
whole of the eatate.
In Walker v. Mann, 143 S.W. (26) 152, error
refueed. the Court of Civil Ampeals for the Third Su-
preme J6dicial District of Te&s held that the amount
paid a8 Federal Estate taxes vaa not an authorized de-
duatlon in determining the amount of inheritance taxes
due under our statute. Thus in this etate we have a
similar predicate end the reasoning of the Supreme
Court of Washington is applicable here. The Leglsla-
ture having required 8s a condition to succession that
the tsx may have to be paid on a portion of property
never received, the question is whether, upon the same
,oonsideration, it hR.8 seen fit t0 seoure the receipt
of this'amount by a lien upon such property. We are
of the opinion that it has done so.
Artiole 7133 provides that the lien ehall ex-
Irt 'gn all property subject to tex&tl.on under this I.&w
The property subject to taxation "under the law"
is; iy the terms of Article 7117, V. C. S., "All proper-
ty within the jurisdlotion of *hi8 State . . . and any
intereat thereln"including property paaeing under a
general power of appointment exeroised by thCdecedent
by will, including the prooeeds of life ti8UranCe to the
extent, eta., . . . which shall pa88 abeolutely OF in
trust by vill, or by the Iaws of descent and distribu-
tion . . . iir by deed, grant, sale or gift made or in-
tended-'to take ef,feot in possession and,,enjoyment after
the death of the grantor or donor . . .
Whenever property is-transferred by shy of
these enumerated methods the tax 18 imposed even though a
Page 6 (V-769)
&a. Robert S. CalveePt,
the property is oth&wise dispoeed of a8 Vhbre Bdolk-
tested will is probated b virtue of oompraniee we-
mat, Crew v. M&q 162 %.W (26) 117 Wx’oz’ rMU8ed
antIeven vhere the hevisewai made put&ant to a oan-'
reot with the deoedenk, Chenuard v. De8mond, 169 R.V.
26) 788.
The property here involved paI98ed by tthr till
of L. J. Hart to his daughter, was eubjeot to tan um&aF
the‘~plain terms of Artiole 7117, and therefore tba lien
lttaohed thqeto. Artiole 7131 deolaree that &la liena
al&all exist from the death of the deoedent until pa&
This being the mandate of the statute, only payment aan
l%tingui8h the lien, and you are without authority to
iaeue the release sought.
The State's lien to seoure payment Of
iiiherltauce taxes attached to the property
pas8ing by will at the aeath of the testa-
tor and persisted despite aonve anoe by OS-
eputor to satisfy claim8 agef.m t the errtate.
Only payment can extinguish the lien, sn8
$E gCg:troller has no authority to release
Articles 7117, 7131, 7133,
v. 0. s.' In Re Kennedy's Estate, 61 P.
998.
Yours very truly,
A!rTOrn~ c#mRRALOF TIYIAS
,..’ :,
MCrm&ibh
APPROVH)