                                               R-363

                  EATT~R~Y              GENERAL

                          OPTEXAS




                        June 24, 1947

Honorable Qeorge H. Sheppard
Comptroller of Pub110 Aacounts
Auatln, Texas            opinion        NO. V-264
                               Re:   Whether or not under
                                     submitted facts a real
                                     property transfer mede
                                     leaa than tvo veara be-
                                     fora decedent's  death
                                     la subject to Inheritance
                                     tax by virtue of Article
Dear Sir:                            7117, B.C.S.
          You have asked ior an opinion from this Depart-
ment aa to vhether or not the property described in your
request la subject to inheritance    tax by virtue  of Article
              we quote the follovlng    rrom your letter   of
igli   Kf%47:
           "Nr. Albert 1. Bitter died a resident
     o? Bexar County on Januaq 23, 1946, and at
     the proper tlw an lnherltance    tax report
     vaa filed for his estate.    We are nai examln-
     log the report and In our lnveatlgatloa     ve
     have found that the decedent In September of
     1944, by deed .aonveyed to the Frlara of the
     Atonement, Iuc., a religious   orgenlaatlon    In
     Rev York, 943.45 acrea or land In Bexar Count*,
     and in conalderatlon  thereo? aald Frlara of the
     Atonement, Inc. agreed to erect tvo ahumhea at
     a coat oi not leaa than $35,000.00 eaah.       The
     time and plaae, aa ~011 aa the plana for erea-
     tion o? aald ahurchea, are at the dlaaratlon      of
     the said Friar8 of the Atonement, Ina.
                'Furthemore,  the Friara of tha Atonement,
     Inc.       promlaea and agrees to pay to the lald Al-
     ;;z        f. Bitter the sum of 4250.00 per month ior
            .
           The aopy of the instrument vhlah you enclose and
to whlah you refer aa "the deed" falls to ahov a place for
the grantor's  rignature.  From the faata at our dlapoaal
Honorable   George H. Sheppard - Page 2


we aannot aaaertain whether or not “the deed” woo proper-
ly exeauted and delivered   in Oompllance with the requlre-
menta of Artlale 1288, R.C .S.; however, we will aaaume
for the purpose ot answering your question that there waa
an absolute’ and valid conveyanaa by Albert M. Bitter to
the Friars of Atonem&t, Inc. of all of his lntereat     in
the property described by the instrument.
           Prior to 1939 there waa no provision  in our
statutes f’or taxing transfera made “in contemplation    of’
death”.  At that time the legislature  lnaarted in Article
7117, Ch. V, Title 122, R.C.B., the following   provision:
              "Any transfer made by a Brentor,     vendor
       or donor, whether by deed, grant, sale or
       gift,   shall,   unless shown to the contrery,     be
       deemed to have been made In contemplation         of
       death and aubjeat to the same tax aa herein
         rovlded,   if such transfer   is mada within two
       P 2)  years  prior  to the death  of the grentor,
       vendor, or donor, of a wterlal       part of hla ea-
       tate, or If the transfer wde within auah
       period la In the nature of a fkal       dlatrlbu-
       tlon OS property and without adequate valua-
       ble aonalderetlon.”
            This provision  waa retained    unchanged when Art-
icle   7117 waa aga.ln amended In 1945.
            The source of wny of the provlalona          of Chapter
V, entitled   “Iuherltanoe    Tax”, lies in the Federal’ Eatate
Tax Act, 26 U.S.C.A. Int. Rev. Code, Ch. 3.           The preaump-
tlon la that the leglalature       knew of’ the oonatructlon
which had been given theae provlalons        prior to their adop-
tion and therefore     intended to adopt the statute as oon-
atrued by the Federal Courts.        Blackman v. Hanaen, 140 T.
536, 169 S.W. 2d 962, citing      Board of Water Engineers v.
MolCnl~ht 111 Tex. 82 229 9. .
n*&          other auth&ltlea     Tihri        Ezi,“,“k;     iedzl
caaea decided under Section 611 (c) of the Federal Aot
from which those parts of Article        7117 which are deolaive
of thla question are dravn, muat be considered.            Bar need
our oonalderetlon    be limited to those Federal case8 which
were decided prior to 1939; for lnaamuoh aa our oourta
have not aa yet construed that part of the ‘39 amendment
whloh provides that certain trauafera if wde In aontempla-
tlon of death are taxable,      the recent pronouncamenta of
the Federal Courts are highly persuasive.
Honorable   George B. Sheppard - Page 3


            Section 811 of Title 26, U.S.C.A., provides
that there shall be included In valuing the gross estate
of a decedent “all property,    both real and personal,  tan-
gible and intangible,    wherever altuated except real pro-
perty altuated outside of the United Statea . . .” to
the extent of the decedent ‘a interest,    aa set out In the
aubdlvlalons   which follow.
Subdivision  (c), “Tranafera in contemplation    of,   or tak-
ing effect at death”, reads aa follows:
            “To the extent of any interest    therein
     of vhioh the decedent has at any time msde
     a transfer,    by trust or otherwise,   in con-
     templation o? or intended to take effect       in
     poaaeaalon or enjoyment at or after hi8 death,
     or of which he has at any time wde a trana-
     for, by trust or otherwise,      undar whlah he
     haa retained for hi8 life or Sor any period
     not ascertainable    without referenae to hia
     death or for any period which does not in
     ?act end beiore his death (1) the poaaeaaion
     or enjoyment of, or the right to the lno ome
     from, the property,     or (2) the right, either
     alone or in oonjunotlon with any person, to
     designate the persona who ahall possess or en-
     joy the property or the income themfrom;         ex-
     cept in case of a bone fide sale for an ade-
     quate an4 full oonaldaratlon      in money or money’8
     worth.    Any transfer   of a wterlal   part o? hi8
     property in the nature of a final dlapoaltlon
     or dlatrlbutlon    thereof,  wde   by the deoedent
     within two year8 prior to hla death without ouch
     aonaldaratlon,    ahall, unleaa ahown to the oon-
     trery, be doomed to have been wde in aontampla~
     tion of death within the meaning of thla rub-
     ohaptar,”
            A atriklng   and important dl?feranaa betwean tha
 uoted prowlalona     of Artiola 7117 and thoaa o? Ueation
1 11 (a) lie8 in the foot that under the Fedora1 lav “83,
tranafar” whloh the dacadant haa “at a
truvlalf     wda “In oontemplatlon -j&&&y@
                                   o           !gp;,:‘,
Statute la allant with regard to the taxing of %y trann-
iera’ In oontamplatlon of daath exoept thoaa wde        within
two (2) years prior to the death of tha gmntor,    vandor,
or donor’.
Honorable    George H. Sheppard - Page 4


             The trensfer   In question here was w4e within
the two year period.       The Fed&al aaaea which have dealt
with the a~~lloatlon      of the rebuttable   weauaMlon   (ao
olaaalfle4~in    wny oaaea fdr example, ir.3. v. Welli
283 U.S. 102, 51 3. Ct. 447; Rea v. Helner, b F ( 2& 389;
Mgera v. Magruder, 15 F. Supp. WM) un4or the Federal law
an4 whiah were decided before 1939 should therefore        be de-
alalve unleaa other w jor variations        exist.  It ahould be
note4 at the outset, however, that those oaaea dealing
with transfers    in onntamplatlon of death w4e “at any tlms”
are ln4lspenaable     to anx study of the meaning of the phrase
“contemplation    of death as coastrued by the Federal aourta.
          Let ua then examine the transfer   w4e by Mr. Al-
bert M. Bitter to the Friars of the Atonement, Inc. In the
light of the f oregolng general atatementa .
           First of all here we have a ‘trenafer”   “wde by
a grantor ’ “by deed ” “within two (2) years prior to the
death of the grantor’.    30 muoh la clear an4 ln4laputable.
            The prellmlnary  lnharltanoo tax report from
your files   and other Information whloh you have given us
eatabllshea   that the value of the property tranaierred
vas approxlwtely     $80,000 an4 that the estate left at
death by Albert R. Bitter vaa worth approxlwtely      $35,000”.
Thus at first   glanoe there would seem to have been a trana-
for “of a wterlal     part” of Albert M. Bitter88 eatete.
          However. the atatlatloa   ooatplled by Mr. Edmund
W. Pavenatedt and-given la the very e%oellen% artlale    Taxa-
tion of Trenafers                                A Pro osa7
                                                 &
                             pinion, would Indicate other-
wise.  Mr. Pavenatedt says that:
           f’Aa far aa ooncerna the vague Gequlre-
     q entthat the transfer    must be of a 8wteria1
     part* of decedent ‘8 property,   the 137 oases
     whloh mention the proportion    o? the gift to
     the total eatate show the following    meanlng-
     leaa results :
Honorable   ffeorge H. Shopper4 - Page 5


                          “Gifts held to      fflfta held
                           be not in oon-     to be in
                           temp~atlon of      0 ontempla -
                           death              tlon of death
                                  8
                                 21
                                 18
                                 21
                                  6

                                  8
                                  6
                                  8

            Thus there would seem to ba no one guiding
Federal conatruotlon     of thla part of the statute whloh
oould be pre8Umad to have ‘been adoptad at the time the
Texas statute was auaoted; nor wy       ombe  drawn by bay
of parauaslve analogy from thq later Federal aadea.
Tha failure   of the Federal Court8 tb give more oonaldsra-
tlon to the statutory requirement of the “wtarlallty”          of
the part tmnafarred      la, in the wrlter~a opinion,   aaally
explainad.    In general the rebuttable    pr~aumptlon created
by the Federal statute adds little      to the ouatowry   pre-
sumption In favor of the oorreotnaaa of clny 4etermlnatlon
wda by the Commlaaloner.
Death, (previously    olted);
TTTj-54 3. Ct. 8; Commiaai
249; 320 U.S. 467.
far regardleaa  of Its prop
the total estate la taxable    if wde in oontemplatlon     of
death, an4 alnce the finding of “taxability”      by the Com-
q laaloner  reaulta in the aame allocation    of the burden of
proo? aa doer the olauae which oraatea the rebuttablq       pre-
aumptlon, there la little    axouae for wklng “wterlalltyw
a 4aolaiva faator when the transfer     oaoura within the two
year period.     To do ao would result in wklng it more dlf-         P
floult   to Impoae + tax on transfers   wda during the very
period within whloh tranafera    ara preaumptlvaly wda in
contemplation    of death.
            Under the Texas atatute, however,    the only tram-
fara vhlah are tamble at all are tnoae althar OS “a w-
terlal   part” of the eatate or “In the nature o? a final
dlatrlbut%on    of property”.   Thbrefore,  the “wter1811tf   d
the part trenaferred     aeema an lnsaaapabla requialte   to
tha lmpoaltlon of tha tax where the tranafar la not aa-
railed aa “being in tha nature of a final dlatrlbutlon       at&“.
Honorable   George R. Sheppard - Page 6


             This De~rtme~~'a   qpinlon o-6678 <Iscusses some
of the decisions    from other juria4lotions     which have con-
strued the meaning of the word "material"        aa used in stat-
utes almIlar to the Tetis statute.        Various tests wy be
applied,    say the oourts;  for example, "the ratio the gift
bears to the whole estate is a very important factor,
          is not per se the determining factor in each case.
   e size of the gift itself    irrespective    of the alee of
the estate has a direct bearing upon the answer."           In Re
Stephenson's Estate, 177 R.W. 579. Likewise to be conr
  Id    d i th time within which the estate could be dis-
losz?of    !ereethe  gifts continued.     Chaae~s Executrix v.
Commonwealth 145, S.W. (24) 58. In general it is reoog-
nlaed that t e auestlon of wtarlalltr        is a .iu4iolal auea-
tlon which must-be determined from thi facto-and         olrc&-
atanoes of each case.
           Applying the teats set out above to the facts cb
this oaae it appears that Mr. Bitter      transferred   apprnx-
ltitely  b/5 of his total   estate.   Even had the estate been
a larger one the value of the property transferred       la ala-
able by any standard.     The residue of the estate vaa not
large enough to support another such gift.       Clearly the
requirement of "msterlalIty"     has been met.
              The Federal statute follows      "wterlal   part of
his property"     ~mmedletely with "In the nature of a flual
distribution,     etc.",   i.e.,   a further requirement haa been
added to that of "wterlalltg"           of the estate transferred.
This is not true of the Texas atatute in which the word
"or" appears before the phrase "If the transfer wde vlth-
lrsuoh     period la in the nature of a final dlatrlbutlon
of property an4 without adequate valuable conalderstlon."
As a result     the Texas statute seems to be defining two
types of tranafera,       both of vhloh a,re taxable If made in
contemplation      of death.     The transfer  in thla case b6lng
of the first     tspe we need not determine whether or not It
was a trenafer       'In the nature of a final distribution      of
property"     nor pass on whether or not this phrase la to be
construed from the standpoint of the effect           of the trana-
for or from the intent of the trans?eFor
            The exemption which is aooorded transfers    for
*adequate valuable conalderatlonnls     contained only In the
clause which wkes taxable trauafers      "In the nature of a
final dlatributlon";    whereas in the Federal atatute the
exemption for "bona fide sale for an adequate an4 full
consideration    in money or q oneyts worth" la place4 follow-
ing the enumeration of all the various transfers      which
Honorable    George H. Sheppard - Page 7


811 (c) wkes texsble.        The last sentence of 811 (c),
which creates the rebuttable._ preaumpt;on?-
                                     _         embodies
                                                 .     . the
exception by referenoe      ln tne pnrase “WltnouS auon oon-
slderatlon”.      However, to deny the exemptlve effect    of
the phrase “without adequate valuable consl4eratlon’        on
the type transfer     first  name4 in the Texas statute vould
be to create an obviously unintended absurdity.        We will
therefore    next consider whether or not Mr e Albert M.
Bitter’s    transfer  of a “material part of his estate” woo
wde for an “adequate valuable consideration”.
            Prior to the act of 1926 the Federal statute
use4 the phrese “a bone fide sale for iair oonslderatlou
in money or money’s vorth”.         This phrsse was interpreted
in Fergtison v. Dickson, 300 F. 961 (writ of certiorari
denled in [I-~              . 3. 628. 45 3. Ct. 126).     The
Court hel4~that~“falr      oonalde~tlon”     was ’ a consldera-
tlon which under all the circumstances         is honest, reaaon-
able, and free from suspicion,        whether or not strictly
 ~a4equate1 or 'full'".        One of the groun4s given for the
\oitibgt;ts    that ti previous revenue act he4 use4 the vor4
                Evidently dlspleesed     with this reqult Con-
gi&aii befoie 1939 again’ ohanged the provision       and the
;l&s;     E  used repeatedly by the Interns1 Revetue Code,
      .         Title 26, Sections 811 and 812 is adequate
an4 fuil'c&l4eretlon         for money or money’s .worth”.    Al-
though, the+erms of the Texas statute “adequate val-
uable oona14eretlon”      are not literally’ thoaa of the Fed-
eral statutes,     und,er the ~holdlug of the Ferguson case;
the use of~~the word “adequate” alone down48 aomethlhg
more by way of consideration        that “which under all olr-
otances      la honest, reasonable an4 free from auaploion”.
           A “valuable oonsl4eratlon’!   wp consist     of
something other than the payment of money Kennedy Pasture
Company v. State, 196 S.W. 295.      @‘Valueble* means more
than “nominal”.    The aubjeot wtter    of the oontraot an4
its value to the partlea ooncerned must be aonaidered in
determining whether or not a “valuable oonalderatlon”       ex-
iota; however, it is not riecesaary that the aonal4eratlon
exchanged be, bf relatively   equal value.    ffrlffln v. Bell,
202 3.w. 1036, 1037.
          Let ua examine the various ret ltala in “the
deed” which set forth the ootil4emtIon   for thla transfer.
A phrase In tha seaon pa&graph reads aa follows:
             ~ITRJESS: That the said Albert H. Bitter,
     for    an4 as an evidence of love an4 devotion for
Ronorable   Qeorge Ii. Sheppard - Page 8


     the Rown-Cathdllo  Religion and the dealra
     to have the Ronmn-Cath~llo Religion apreed
     to al; wnklnd, 4oea by theae preaenta, etc.,
      . . .
            If thla phrase be oonatrued aa'belng the e,qulva-
lent of a atatement that Albert M. Bitter wde the con-
veyance "In oonal4emtlon"      of "love an4 devotion"  It la
well settle4   that ouch conalderatloh    In co&airs olmum-
stances wy be held to be "good" consideration       but that lt
la not "valuable"   oonal4eratlon.     Bouvler'a Law Dictionary,
3rd Revision,   page 612-613.
             By the third paragraph of "the dead' "the Frlara
of the Atonement, Inc. promise8 4nd agz%ea to pay.the arid
Albert M. Bitter,     the sum of Two Hundred and Flfty(~25CJ.00)
Dollars ‘per month on the flrat day o? each month, oommeM-
lng July 1, 1944, and ending with the regular monthly pay-
ments next proceeding the death of the said Albert 1.
Bitter".     Whether or not an annuity aonatitutea    aufflolac&
conaI4eratlon    within the m6anlng of the partlaular     atatuta
has been aonal4ere4 in wny deolalona.        In general,    "tha
4eclalve    point tipon which the raault aeew to depend la
 . . . whether or not the annuity to be pald tha transferor
in oonatderatlon     for the transfer  of the property at
least equals tha eoonomia value of the property tranaferr-
ed.    Aaaumlng that this statement la oorrect,     the teat la
whether or not con.sl4erlng all the almumatanoea,        the
transferor    could have bouuht la the oDen smrket the atlpu-
latsd annuity In exahange-for      the pro&&y   tranaf&red.
157 A.L.R. 995. See partloularl        note on U Ike v. Corn-
                                   ,86 F. (26) &+
                                     .
            At the time Albert M. Bitter       w4e the transfer
to :the Friars. of the Atonement, Inc. he waa~past aelienty
three yeara of age.     Even aaaumlng that he woo' then in ex-
cellent  health for a men of hla age and that he ha4 @id
the highest current wrket prloe, he 00~14 have purchased
an annuity to pay the amount the Frlara of the Atoneme&
agreed to pay for approxlwtely       thirty-one   thousand dol-
lara.   Instead he tmnaferred     property worth OlghVthou-
aand 4ollara.     Thus aa oonslderatlon     for the tmnafer    the
annuity vould aoamely meet the 014 teat of the Farguaon
0480; i.e.,    under all the olmumatancea it does not aeem
to be "honest, ~aaonable,      and free from auaplolon."       It
falls far ahort of being the Radequate valuable oonaldera-
tlon" requlalta    to gaining the exemption.
Honorable   George H; Sheppard - Page 9


            Finally by paragraphs 5, 6 an4 7 of "the deed"
the Friars of the Atonement, Inc. promise to eract tvo
memorial ohurahes at a cost of not leas than $35,000
each.    One church is to oonatltuta    a memorial “to the
honor of Mr. Albert M. Bitter and his relatlvea”;        the
other, “to the honor of q . . Mrs. Albert Hi. Bitter
an4 her relatives.”      The Friars of the Atonement prbm-
lse to “diligently    look to the erection    of both Churches
aa aoon aa they can conveniently      do ao after sale bi, ln-
come from the aforementIon~4 property wkea this proce-
dure f'lwnalally    possible;    but the time and plea0
    . . are at the diaaretlon    of The Father OeneMl of the
irlara   of the Atonement, Inc. in oonaaltatlon      with hi8
Bosrd of Dlreotora.”
            Many Federal aaaea have dealt with the deUuoti-
blllty  of decedent Ia unpaid pledge8 to ohrrlt8ble,        rbll-
glous or a4uoatlonal lnatltutlona.      The analogy between
that problem an4 the one we are here oonal4atilng la ob-
vious . Although it la genemlly       oonaeded that a pledga
w4e In conaldemtlon      of a atlpulated     applioatlon   or ua6
of tha property transferred     la au?flalently     supported by
aonaldar8tlon   to aonatltuta   a valid oontraot,      moat of the
oaaaa hava held that this wea not au??lol~nt          to meet the
raQulrament o? ‘303 (a) (1)’ irhioh allored     sxaiptioaa   for
ulaiw,   eta., ag8laat thi 6atate,     eta.,   I? ‘fos’an "6U6-
quate and full oonaideNtlon’?or       money or moa6pa worth.”
157 A.L.R. 1015.    The tvd ‘leading oaaea vhloh riloh thla




the amount would hrva beaa’exaarpt aa a oharitablr        ba-
quart; but the paat holdln#O era Otlll lirt;horlty       gedm-       .
ally for what ooaatltutea   adequata aad vrlwble         ooaalU6M-
tloa for money or monay’a worth.“)
            Ror doea the agr6awat      to ereot the Qhturohaa,
       to ethar with tha payment of the Onnult ooMtitut4
%~uififbn6.            ooaaIdwatlon~”       To 80’bob would in
effaot oraata a new lx a mp tlo    for nrali~loua,  lduoatlornl
or oharItabla   bequeataI     To be emopt    undrr Art1010 7122,
R.O.8., a r411 loua, lduoatIon41 or ohrNtrbl@          bwu@at
mu4t ba used wf thin the 8tat4, aad, by r404nt dOOillOII,
thla geographlorl    llmltatlor:  oa thm u81 muat bo 6xpr648-
ed In the v111 ltaalfr
Statea v. Shrppard,     198
Honorable   George H. Sheppard - Page 10


men who knew that death must soon come to him could by
aaoeptlug a oonal4eratlon   leas than “a4equate and val-
uable” and, in addition,   by wklng certain “non-geo-
graphical” stipulations   aa to uae of the property trana-
forred clmumvent the requlrement~s of both Artlole    7122
and Article 7117.
           Having thus reeohad the ooncluaion that this
transfer vaa not wde for an “adequata valuable oonal4ere-
tlon”,  it la subject to tax if the transfer was made “in
contemplation  of death”.
           In the leading oaae of United States        v. Wells,
283   U.S. 1102, Rr. Chief Justice Hughes aam
            “There aan be no precise dellmltation
      of the transactions      embreced within the coa-
      oeptlon of treaafer      ‘In ooatemplatlon of
      death’ as there aan be none In relation       to
      fraud, undue lnfluenae,      due process of law,
      or other famlllar     legal concepts whloh are
      applicable   to wny varying olmumatanaea.
      There is no escape from the necessity      of
      carefully   acrutlalzIng    the aImumataaoea of
      each oaae to detect the dominant motive of
      the donor in the light of his bodily and
      mental condition,     and thus to give effeot    to
      the wnlfeat    purpose of the statute.”
            Mr. Pavenatedt has a greet deal to say about
this “dominant motive teat” and the dlffloultlea        attend-
ant to its applloatlon      in the Yale Law Revlaw Art1010
prevloualy   quoted.     He points out that shortly after the
Wells oase was decided the toot woo incorporated        in U.S.
Tres. Reg. 80 (1934 Ed.), Article       16 but that the vary-
ing decisions   that followed and the dlaoouraglng      reobr4
of the Government In its attempt to prove the requisite
motive of a dead men in oontemplatlon        of death cases led
to T. D. 4966, 1940 - 1 Cum. Bull. 220, which, deaplte
the Wells case, in effect       atatea, among other things,
that a transfer    la in oontemplation     of death I? It la
prompted by a      motive associated    with death, even though
it nay be mo EFvoted more strong&by       motives alaarly aa-
acclated with life.       However, since Mr. PaveMtedt@a
article   woo written.    the Sumsme Court haa again spoken
on this zmtter.      Alien v. T&at Co. of ffeorgia, 66-3~.
Ct. 789. vaa deaiaed Januarv 28. 1940 . The court aava
that oertlorarl    waa granted beoiuae of oonfllot     betwken
the judgment of the Circuit Court of Appeals and those
Honorable   George H. Sheppard - Page 11


of other    clmults . The following   part8   of the opinion
reaffirm    the “dominant motive” test.
            “It vaa said in U. 3. v. Wells toi-
                                     q
     tatlon omltte4j that a gift I In contem-
     plation of death vithln the ianlng of the
     estate tax law if ‘the motive which ln-
     dwea t It la ‘of tha sort whloh lea48 to
     teatamautary 4lapoaltloa,      . . . Slaoe tha
     purpose oft the contemplation     of death pro-’
     vision was to reach substitute8      for taata-
     mentary 4lapoaltlons     in order to prevent
     evaalona of the tax ~Itatlon       to U.S. v.
                        the statute la aa~,
                          for nay reaaoa the deoe-
     deat beoomea ooacerned about what will hap-
     pen to his property at his’ death aad aa a
     result takes aotlon to oodtrol or in aoma
     wnnar affaot    Its devolut;loa.
           “Thet la a oorreot statement of the
     governing principle   for It presumes tha
     exiatenoe of tha requlalta     motive.   The
     tmaafer   la,wde    in aoatemplatioa   of death
     I? the thought of death la the ~lmpelllng
     oauae of the transfer’.      City Beak Farmer8
     Trust Co. v; %aOowan 323 B.S. 294 93           G
         ct   4%    49c)   The trana?er.&y    be’ao
     mklviied   eden though the daoedent had no


     away to4ay will not be included In his aa-
     tata when he dies.    All auah gifts plainly
     are not wde Ln contemplation      of death In
     the atatutory aanaa. Many gifts,      oven to
     those who are the *tllM1    an4 appropriate
     objeota of the donor18 bouaty, are motlvat-
     ed by ‘purpoaaa aaaoclated    with life,   mth-
     or than with the 4IatrlbutIoa     of property
     in antlolpation   of death.’ &!.tlng U. 5. v.
               Thor0 motlvea aover a Wide range.
                   Federal Eatate k Gift Taxrtlon
                 609 at aaq.
           ,“Thare may be the desire to reo ogalae'
     apeolal aaeda or exlgenalea or to dlaoharga
     moral obllgatlona.    Tha gratl?ioatlon  of
Honorable    George   H. Sheppard - Page      12


       such
       ._   desire
             ._       my._ be -8 m-e
                                  --
       cive man any tnougn or aeath.
       U&.V;.V~;l”,7b,
                       I
       tlve Is a question or raot in eaoh oaae.”
       TEmphaala added)
             Various evldentlary       factors     ,$ee 1 Paul Fed-
eral   Estate and Qlft Taxation (1942) 8 615 et
     tiry tn             t1    that the treasfer         to
o~Atoneme&pi~iU~deo~n            ooatemplatloa       of deeth.     The
advanaed age o? the traneferor,           the great value of the
property transferred        a8 well es Its proportion           to the
decedeatts    estate all seem to lndloate that the deced-
eat waa mating a final dis~oaltloa            of hla property.
Likewise, by the will lteelf           the Oblate Fathbra, aa’
rea Id ue                 reoelve 429 001.81 of the
$32,201%1~%ei&iete             aa eat&ted        in the p~~~llrnlnary
Inherltaaoe    Tax Report.       Thus Mr. Bitter by transfer
before death and by wlll’left          virtually      all he posseas-
ed to the Cathollo Churoh. , The traneier bei                   ol the
bulk of his estate it would seem to be not on               Y y ‘a
part of the general testemeatary           aoheme”, 1 Federal
Eatate ‘and Gift Taxetlon, prevloualy            olted, but the moat
tmportaat part oT the testamentary            aohime.       The ohurohee
that bre to be erect&d aa eu ultlwte              reault of the traea-
fer are to be~m6mo+lela “to the honor of l&. ‘Albbrt R.
Bitter atid his rexatlveb.            a,nd t6 the honor oi Mm.
Albert Y. Bltter~and her’r&~tlveti’i              All these faota
polat’to    the Conoluelon that the thought of deeth, aa a
c6ntrolllug    motive, prompted the transfer.               C*rta laly
notie o? the facts at our dldpOea1 are su?floleatly                  la-
dlcetlve    of ‘motives asaoaleted        with life” to overoome
the ptatutorf preaumptlon         that the trauefer         was wde in
coutempl&loa      oi- desth.    You are thereiore         advised. that
the property tretiferred        by Albert H. Bitter to the Friara
bf the Atoaemeat,      Iio.,   la subjeot to lnherltanod           tax by
virtue   of Artlole    7117, R.C.S..


                          SUEMARY

              In order to c~ome within thet part oi
       Article   7117, R.C.S., whloh provides that
       transfers   -de within two rears prior to
       the death of the decedent atie. presumptively
       mede In aontemplatlon      of death’the property
       transferred    q unt oonetltute  a tmterlsl  part
Honorable    Qeorge H. Sheppard - Page 13


        of the estate or the transfer must be in
        the nature of a final distribution      or pro-
        perty.   Annuity and agreement to build
        churches did not constitute     the adequate
        valuable consideration    necessary to exempt
        materiel part of estate transferred      within
        two (2) years of death from State lnherlt-
        ante taxes.    Where the submitted facts fall
        to overcome the statutory    presumption of
        "contemplation   of death" the property trana-
        ferred Is subject to Inheritance     tax by
        virtue of Artlale 7117, R.C.S.
                             Yours     very   truly

                         ATTORNEY
                                GENERAL
                                      OF TEXAS

                                        '--cclLe,
                         By?i?T%k .                 Creel
                                              Asalstant

MC/lb




                         ATTORNEY     QlllfBRAL
