Honorable Robert S. Calvert      Opinion NO. ~-446
Comptrollerof Pub11.c Accounts
Capitol Station                  Be: Proper distributionfor
Austin,~Texas                        inheritancetax pur-
                                     poses of the deceased's
                                     spouse's community l/2
                                     of the cash surrender
                                     value of certain insur-
                                     ance policies on the
Dear Mr. Calve&:                     surviving spouse's life,
     In connection with your request for an opinion of this
office on the above captioned matter, you have advised us
of the following facts.
      By her last will and testament, the decedent, after dis-
posing of certain speolfia property, devised all the residue
of her estate to her two stepsons and her daughter in equal
shares, with a trust proviso In connectionwith the daughter's
share, the provisions of whlah are not material here. At the
date of the decedent's death, four life insurance policies
taken out on the life of her survivinghusband and naming the
decedent as beneficiaryhad a cash surrendervalue of
$17,357.00.   All premiums had been paid with community funds.
You ask that we advise whether l/2 of the cash surrender
value of these policies should be distributedfor inheritance
tax purposes under the last will and testsment of the decedent
or whether the decedent's l/2 interest passed to the husband.
     In Thompson v. Calve&, 301 S.W. 2d 496 (Tex. Civ, App.,
1957).
 --.,_ thecourt-concerned      with the following facts. At
the time of the death of the decedent,her survi&g spouse
had three insurance policies on his life. All premiums had
been paid with community funds. The decedent was the named
beneficiaryof each policy, and eaah policy provided that on
her death the two children of the marriage becsme the bene-
ficiaries. The Insured, the survivinghusband, under the
;;rmmo;f each policy had the right to change the beneficiary
          Inheritancetaxes were assessed and included l/2
of the cash surrender values of the three insurance,policies,
which had a total cash surrender value'of $15,138.33.
     The court pointed out that the cash surrendervalue of
the Insurance policies involved was community property, citing
Womack 'I.Womahk, 141 Tex. 299, 172 S.W. 2d 307 (i943j; At -
-498,     the court said:
Hon. Robert S. Calvert, page 2,     Opinion No. ~~-446


          “(3) Since we have concluded that the cash
     surrender value of the insurance policies In ques-
     tion was oommunity property at the time of the
     decedent's death, consequentlyone half of such
     surrender value passed under the will of decedent
     to her husband, appellant herein, subject to tax.
     Article 7117, V.A.C.S.; CaliforniaTrust Company v.
     Riddle, D.C.S.D. Cal. 1956, 136 F. Supp.7.”
       You are therefore advised that for inheritancetax pur-
poses the decedentls community Interest amounting to l/2 of
the cash surrender value of the insurance policies on the
life of the survivinghusband passed at her death under the
residuary   clause of her will to the aurviving stepsons and
daughter. You are therefore advised that the inheritance
tares should be computed accordingly.
                         SUNMARY
          Where decedent willed the residue of her estate
     to'three named beneficiaries,for Inheritancetax
     purposes the decedent's l/2 community Interest in
     the cash surrender value of certain insurance poll-
     ciea on the surviving spouse's life passed to said
     beneficiaries,and Inheritancetaxes should be
     computed accordingly.
                              Very truly yours,
                              WILL WILSON
                              Attorney General of Texas



MMP:db
APPROVED:
OPINION COMMITTEE
Geo. P. Blackburn, Chairman
L. P. Lollar
Howard Mays
Wayland C. Rivers, Jr.
RRVIEWRD FOR THE ATTORNRY GENRRAL
By: W. V. Geppert
