r -.
I..
186
OFFICE OF THE ATTORNEY QENERALOF TRICAR
AUSTIN
rboro faotr,kindly
r the polloiorbalag pay-
Jlamodb*B,tlrlarlesmd
a a lng
lp lr r olr
f th eo r ta to
are taxable undrs thr ,Sbdr
“W* Y i!u abigo quoetion Is anmom
.od yor, 18 lb the oonbntioa o? the Dopart-
~qont that the atetute 10 retro-aotlrcrand
.a~~1108 ts tha ~oliolor q? fnruranae taken
one boioro tho pa8rago or tho Aa%?*
,Ronorable George R. Bhoppar4, pa@ 8
&Mel* PllT of U8 Ilsvfredaivil 89etuto* w
rpaoad04 in l#bO roadl, in part, a8 iollowa;
“All proper&y rlthla tho &rl.sdiotion oi
this Btato PO81 ox ~orro~tal,* e L lnoludiq
,tbp r o w& o r 1 Ko lB 8u P a to
a oIk
* lilo
x tM $o i
W~wo unt noolirbh bytk mom&or or ad&a-
1JtrrSooaaa irmranoo uadm polieiw taken out
by *ho dqoodonC rpoa hi8 mm life and to chr-
li$'Oi ChO lUO8B OVW %+rty dOU8Md DOlbU'8
7% 000) of t&u houat reanlvablo b{ all other
k&..~.i?iO8 ,a# inrwanoo WltiOr PO1 Ob8 takea
out by * ioww*~
hirowll1lm,***
Y UtcIlJ OP h %PU8tby Wilt.
'~Whirk $hrfi pa88 db80
oi by th0 laW8.Of 4089Ont or dirtrllbutlon Of
bhi8 OP My ether #t8tO, or br dood, aant, 8aJq,
ox glit a + + rh411, upon pa88iagto OP for
tho tM* Of
l
ny’*a r 8o Onl
oopporatloa, T l88OOiW
tion, k Subjedt $0 8 $a% ltorth. bmnofit of
tha Pltrtr*r Gonoral ROIOaw ?udkj in aooordanor
with the folloufiy olaarlfiortion. l e + .*
Ia.awwor 64 your tlrrt qtiortloa it 18 rpwront
that the k@irlature ban tazod i$8ur8noo whloh does not
bwoma a pati of tho l8tato of the daoedent bu$ whlob
888oI tm aawd bOnOiiO%8riO#. Buoh taf, how8vor, $8 on
ho wouat of oh, in8uPanoe 3a moo88 oi $40 OOtLOO of
t)
the amowN rroeivod by all Eanafioiarlor on {ho polioiar
kbn out by tkwdoordont upon hl8 own liio.
ah boliote i8 oloar aad wamblgww
tie Imn&r$a
aad ~9 are of th@ opinion tlIat proorodrr 91 brurmoo pol-
iolrr prsring to named knofislarlor u on tho death of l
domdont ara proppclr rabjootr oi l&or% ?an00 kutlon ad
tho tax ha8 beea 80 lmporod by tha above quoted lrbiole.
Tha Lhrgrwno
Wart of Uiroqmria in tho oa8a o$
XX Rf AS&D* WILL 184 %W9, 981, rtrted a8 fO11OW8l
* e e + I The nature mad quality o? rueh
bOMfief~1 fntOSO8t ti tb8. pO1iO108 &IS- 8ho
fimuo d’r lK@ OOB8titllk l g o edground fo r led-
lrletlro a&ion to nrbjsot the proooods zoallaod
thoro&m to iahorltanoo tbaxrtion upan tho ba8i8
that they '8hrll br,dpemoda paP$ of hi8 88%&O
Ronorablo tiorg~ Be. Sheppard, pa@8 b
?OX th0 QtLVQOIO1 Of th0 tPX and Sbii bb taxable
$0 tb8 PerrOll OP pOr.Oll8 Ontitled thereto,’It
18 no tlssontial that qmh prooeodr eh4ll broom,
4 gprt of th0 dooomrod hu8b4ndv8 08t4tO upon his
pt;g ln ardor to rub cot tbra to lnheritanoo tar-
. lt is 8olf-oV idont that by aaans of thorn
pOliOlO tho hurbrnd tPan8tomd 8 14PgO p4Pt O?
hi8 08tate 00 hi8 widow, nhioh beoamol??00tlv0
at his death. Thi8 >Ut8 tho tran84Otion within
tw ?lOld 0r inhqrltanso taxation.*
& JrOUP8000!ld
,' qUO8tiOu r’ou in U&O 48 t0 thO
4pplioab~llItyo? tho aboro atstuto to po p: 16198 of in8tU’-
anoo takm out prior to th0 peseapo of the sbatuto by th0
LoAgirlatup4in 1939, In awwering this qUestIon HI will
as8unw that the polioy of innUP4nW you lnqulro.obouO eon-
tainod thm ordinary olouso~@antIng to the inrtcrodtho
d%; to ohango bonotioiaPis8 ot any tiaa prior to hlr
, Upon 8UOh 4n assumption wo will an4w4P your quo+
tlon,
The qOxa8 Inh~ritanoo Tax l.88 tax bared tapontho
right to propotiy, or, In othor ~0~48,
roooivo ugon tho
Pl@h$ or rucoo88ion. The ~OdSS1OIl8 Of Appeal8 Of lb&l8
ln tho 0.80 of STATE vm HOGQ, ‘PS S.W. (2d) 696, 8tatod a8
f 0110~8 I
"An 4X4minltiOn Of tho 4uthOpitfO8 OOnVinOO8
U8 that tb .b!lO.t MiWi~fJal Pul8 18, the8 inhO?-
itan tar08 8uOh a8 a?0 lorlsd by PWT8tatUto8
go$d to b0 pr~vll4g0 taX48, ,and not property
fn other WOlFtt8,
the tar'i8 upon the right
Of 8Ug0fi88iOn and DO8 UpOn tho prOpOPty~ * + 8 l*
Wo 0.11 four attention to the Zaot that tho pol-
ioier o? inruranoo taken out In the 0440 of ltnRo AllI8'
will, 8uppa, WOPO tskon out prior to tho anendaont bon-
rtmod in the4 0480 tsring.in8UrMaO paid to 4 Mmfid bOW-
tlolary. 'Ihthat 0.00 tho oourt held that tho tax applied
to 8!i4hpollelor t&on out prior to tho lnaot;nsnt of tho
rtetuto booauarethr tax wa8 based upon tho penrIn6 to th0
kno?loiarpwhieh took plaoo at tho timr of dosbh of th@
insured 8ub8equOn* to the onaotmon8 of the 8t4tUtO in qUO8-
t10lh
trh0 SUITS- COUPE 0r mm8800 in th0 0680 0r
RowPablo Oeorgo Fkshoppnrd, pago 4
STATE v* WIN, 36 3.W. (Ed) 88, paseed OA s similar quss-
tloa and 8tatod aI r0iirmt
mi8 4ppOOi i8 ??a S dOOPt hOidiII& 8hO
Qroo..d8, aboto #40,000, of OOPtrin InBUPaaOe
pOlIOiO8 on the Iif0 0s Miohaol J. OaSn dsooam-
od 186uOd p?i0? to tho pasrago Of oh&Or
AOk8 Of TOMO.800, 198) ErtrS So88ion,
to tho lnheritanoo tar bhsroby morodr
dlod Mbruary 14, lOSO, loarln# by hi8 will hi8
lb iP @ l8thO inOiUdin(l ~DIUFUIOO, t0 hi8 WsfO,
A8 hi8 dO6bh b0 h6a $90,000 Of in8UPOnOO in
r0P00, all 0s whloh wa8 parable to hi8 wit0 un-
00n81010nall $80,000 and
tr0 r0r $6 that tho in-
%0X08$ on
liio, the
botwson hi8 Ohhlldnll,
aaoh polloy oontrlnod l olauso’ giving Orin
tho rl#tt 00 ohan@ tho bonotiolary whioh right
ho did not aarolre, th0 doprtmn$ 0s r*nm
8nd taxabioa held 81% Thorprooood8 of Mr.. Gain’8
liio lnruranoo sbovo #40 000 liable 00 the *ax
imposed by said ohaptor h and thi8 rulfna hat-
ing beon mutalnrd by the h:. board, %hO qw8tion
m8 8ubmittod to tha ahanoellor 48 a nlgrood oaeo*
*Wo era oowtrafmcrd to OO~PT with tho
loerned ohanoollor. Tho 'fOMO88.0 fnhOrit.lrOO
tax beIn& lovlod~ upon th8 to loquIpo and
not upon tho right to 48 undo? tb
fsdoral law (Hmmon vr 148 Tona, UB,
88d 8.1. 104f&)and tb in‘thi8~Oa8. be-
lng 'all BaynbSo to 8h0 wlio or the WKO ld ohil-
&on of tho IMUPOa, but with the .mrO8. POlOcI
vatlon 0s tho right. to ohange th0 bmotioIr
an& thr wit0 OT ohirdrrn bsrln(lne rorto4 in T or-
b8t iA 8uOh fOPA% Of POliOr UndOP OUP dOOl8iOW,
thlr right ta naqulro did not booomo liio o tir o
until attor oh6ptor 80 A088 Prr 80s~~ 1919, h6a
80nO lat0 Orr00t, ft iOuOW8 that 110 ~OtZO.OtiVO
lpplloation 18 glton to tho 8tatutO.*
A rePy Peoont QaSo on ohi8 question i8 th0 OS80
of MaIssRxLvr llxwml,34a a,$ (Ed)1sa rr *ho ootu?+
of
hpppr0lr: OS xintu.LJ, fin thil oaael fully dir-
?he oao\lrc~
ou6r.d all tho luBhoritio+ and l)ate& aa iollowaa
r 9 e l l In the pnren$ odm, howover, ‘I,
have no.dab% that’a p3’op.roonrtnxobion 6t our
Btatuto, X4mtuaky btatuter, recrtion 4S8C)la-l~6,~tr
that tho Lm&irlatPn Intonllr& 10 to apply to ‘all
poliOie@ Uh+hOf 'bOkOa OUs bOfO]M 01 OnOr f$R
lSieo tlv*do t.* ml@h p o f*h a mltiou
plain and tmmbiguoor r Wb will no% imply an
laPen$ on *hi pert ai the kgirlaturo *o rxoopf
froa ftr oporatlon 0110%08 Mo*tofom Ukn
OUt b&t%Will QrO9891 (Is 69t8nnin4 d34thrr 61 lid
i* is unoonati~utionel wbn 00 apglled~ It ir
trw thed’atatpkr,‘an not to b* iton a r9ItOI
aotlro erreat, ema where 9ho tegf rl.stuN bar
orwirto maa* alloha atitut*, anle8r ruoh aa
s atantlon oltiarl a~pearm fmn:ph~9;4a~tu8%;-
lolt (Bunlap v# z itOoll, ZOO
880) but a ~$roeotire eff691)“ii I obthnad o&
whan a rta&ute Is applied to r a aequlr94
rfar to it8 ennobient. I8 npp%! ld to t&O 010
f oies in question no *sate4ryltr are irpsM
4 red
or will M later pointed outr
* 9 ,+ c l
“In o o na i4 o r lng th e tllo
o o M tlwtio na ~ity
of
ICentuolq Stetutb In to the poll-
its applioation
0208 inrolre4 we nest,detozalne whether or no8 any
ve8tod PI 88 wora obtained by t&e ~benoilafarler
Of tha popb ioler by ,Win# daol#natad aI‘boueiioi-
ario with the right zbaened In tb irhure(L $0
ohnmg thb b6aetiagnr Wa find that the almoat
oalreraal ru30 ia 8ha 1 whbn a rl(ihB to ahan@
tb) bonei 1010 hes been rtmrrveb to tha inrured
Js tha polloy7 ha kne$ioiOxy nansd has a se* 1)x-
p99tuio~ and a0 re8to& rQht Or interostidud&g
the llfsbilprof tha ln~re4, thfa rule king maI+
Jeo) W the que3iiioalrlon,of oou?U that Bhr .’
benofioiary may aoquira a voWI ri&
0f 0~ by+ 0r~0pb0i03 90ntrqot. 87 da
14 R.&L. l3fMB Laadrarrvm IandmWr
Xy. 778, 818 9.1, a741 ULrgtri6n
tr Xiller, 96 n$*
ru?M naenrd the right to ohan@ the b@ne?iol-
ary, mold (870 IL8 ttt, 49 8.011 lm, 78 In Ed,
405 58 A*L.B* Jesjt 'Rutuntil aha mo!xontof
dea&b tht (Loowlanl ratmine a lagal intereat la
tba polioie8 wbiab gme.bim the power of bi8pe81-
*loa of them lnd that? rooeedm a0 o@nplotal~ or
IS b wora hlemelf the & noflol6r~ of them,' Tha
oourt in that @am, in Irpeakfng oi the powor of
sentrsl over auoh pollolea retain& b an Snsured,
raid the8 auoh power *ia by no moan@ Iha leart
aubrt8ntlalof tha lo al fnoident ot ammrahlp,
Ond lb0 te?mloatloa at hi8 death 80 a0 Bo tree
tha bmmilolarl6r of the polioy from the poem&
blllby of its oxeroler would aeom to b no le8r
a tranrfsrwithin the riaah of the Caxinng pawor
*ban a tramfer offeoteclin oth8r way8 through
drath,* sinoe the bensSlaiery kr the poll0148
in quratlon him aoquira no teatied right but only
a aero 9xp9otansrbr being dealgnatad a# beoeti-
olary wa fell to mea wherein the otatute in qurr-
tlon whn appllcsdto the pOliOi in oontrorerrrj,
inpair the Obll&8tlOn of a OOntra9t or reOult8
in a violation of the duo p?ooraa olauso of tha
14th amonduumt to tha Federal Oonstltutfon o? any
prorlalon bi ou? atate oonatltutlon.*
Xxtb&li.th@ Tennaisoe and Xentuoky oa8eB the
oourt held that the *$.nherltanoe tax war 8 tax upon tho ?l&ht
of auooeaalon and that a tar imposed upon the prooeedr or
inrurrnor polfoie# br a 8batuta whioh wa8 pQ88ed prior ta
the doahh of the lnsu?ad l ubjeoted the prooeeda of ins-
anoe polloiea takaa out rior to thq pssarge of the tax mot
to the 8ax impoee6 then s II* We a011 pour attention, how-
ever, to th trot that in bo$h of those oa8ea the lnrured
had a ridht uuber the terma of the lnruranoe oontaot to
ohenga bb no&d beneflolar at any timr pPfO? to hi8 death,
2hla beihg lo the oourta haxd that the right0 in the pro-.
- -.
. .
- .,, 192 j
&onoreblo (HorgoX1 Shappord,Page 7
oeeda ai& no4 aoortm TV the b8n8flOiadO8 uutil the hatb
of the luawed a& therefore tha proper$v pesaad al oi
8Ueb tins, wbloh woo auba~quent to thi tirm of tb pesa-
age ai the tar sot,
We are of the opLaion that under the authnrf-
4106 the probeebr oi lnsu?anae polloloa payable to named
baneilalarlsr are’aubjrot to the Tex.aa Inherlbanoo Tax
doeplU tbo ho4 $ba$ 4ba pollolea of lmu?eaoe wera taken
ou4 prior40 the ammdaont of lVS@ taxing ln8uraaoe pro-
owla, wbon thr pol~oieain queablon~?eaerted to $h& ln-
awed the r3@ to’ ohange the nanad bextMlela~ in tho
polloy at any ttma prior to hi0 beathi
Tour0 very truly
A!mOltxaT
al?mAL
OfTxA8
By‘t+i$wi
Bt?cab A08104an4 ,
Untitled Texas Attorney General Opinion
Combined Opinion