                            *wus-rrN   11.   -rlcxan


                           February    18, 1950


Hon. Robt. S. Calvert                   Opinion No. V-1005.
Comptroller   of Public   Accounts
Austin, Texas                           Re:       Effect of order of Nebraska
                                                  County Court classifying
                                                  foster children for inherit-
Dear Sir:                                         ante tax purposes.

                From your Petter of January 31, 1950 and the file at-
tached    thereto we have gathered the following facts.

             Mrs. Margaret Naumann Taylor was six and her broth-
er, Walter R. Naumann, was thirteen when their mother died, and
their uncle, E. H. Naumann, brought them from Germany to Nebras-
ka. Mr. Naumann and his wife reared the two children, and they
“were held out as the children of Mr. and Mrs. E. H. Naumann. all
in the State of Nebraska.”   E. H. Naumann died a resident of Hidal-
go County, Texas, on May 10, 1948.     By the terms of his will, he
devised the bulk of his estate to his niece and nephew.

             You request that we advise you as to whether Mrs. Tay,
lor and Mr- Naumann should be given Class A (Art- 7118) or Class
C (Art- 7120) classification   for inheritance tax purposes.   To come
within Glass A, Mrs* Taylor and Mr. Naumann would have to come
within the provision for “legally adopted child or children” of the
decedent,   Class C specifically   provides for nieces and nephews by
including “‘a direct lineal descendant of a brother or sister.”

             At the time of his death E. H. Naumann owned property
in the State of Nebraska.   The County Court of Platte County, Ne-
braska has entered an order assessing      the inheritance  taxes due
under the Nebraska statutes,    The attorneys for the estate have ad-
vanced the following proposition:

                ‘“In an Opinion by the County Court of Platte Goun-
         ty, Nebraska,    a copy of which is attached hereto, it was
         held that these two children were adopted children of
         E. H. Naumann under the provisions       of Section 77-2004,
         Revised Statutes of 1943, of the State of Nebraska,     and
         under the holding of the Supreme Court of Nebraska in
         re Dowell’s    Estate, Richardson  County vs. Stalder, et al,
         31 N. W. (2d) 745.
Hon. Robt.    S. Calvert,   Page 2 (V-1005)



               “ft is our contention that the relationship     of the
        adopted children     was established    in the State of Ne-
        braska in accordance     with the laws of the State of Ne-
        braska, and that they are, therefore,      entitled to inher-
        itance under the laws of the State of Texas as adopted
        children.    That this is in accordance   with the Opinion
        of the Commission     of Appeals of Texas, Se,ztkon B, a-
        dopted by the Supreme Court of Texas in Martinez,           et
        al, vs. Gotierrez,   et al, reported in 66 S.W. (2d) 678.*’

               The following are excerpts     from   the Nebraska    court
order   assessing   inheritance taxes.

                “I find by the terms of the Will . . . there was
        devised and bequeathed to the niece and the nephew of
        the Deceased,      Margaret    Taylor    nee Naumann) and
        Walter R. Naumann I . . . Fertain f real estate . . ~ sub-
        ject to the life estate of Clara Na?lmaon; that <the total
        value received by e . . Margaret       Taylor . . . and , . .
        Walter R. Nauma:nn is $18,251.05         to each, that Marga-
        ret Taylor . . . an-d Walter R. Naumann were in fact
        niece and nephew, respectively,        of the same?,
        E. H. Naumaxm,       but-G=              n.iece and-%=&c
        were personsi<whom          the Deceased for not lessX%n
         ten years prior to death stood in the acknowledgf-ayg
                                                             _---...-
                     -.--
        latlon of a parent and-&at each 1s entitled to an exemp-
         tion of $10 OOO.tSO,and that after deducting such ex-
        emption fs&       each inheritance,   the sum of $8,2,5 1,.rJ_4
        is subject to an inherf<tance tax 6x1the amount of gti2.51
        for Margaret      Taylor o .I* and $82.51    for Wa,Stes K. Nau-
        mann.
               I‘
                    0. 0

                “fT IS THEREFORE        ORDERED and ILhereby as-
        sess a tax on the said right of succession      of Margaret
        Taylor (nee Naumann), niece of the Deceased,          in the
        sum of $82.51;     and it is further ordered and I hereby
        assess    a tax on the said right of succession    of Wafter
        R. Naumann, nephew of the Deceased,         in the sum of
        $82.51;    ~ . D * (hmphasis   added.)

            The facts before the court in In re Dowelll’s Estate are
given at page 746 of the opinion. We quote the following   excerpt
therefrom:

               “‘The evidence shows that Hattie L. Dowel1 died
        on April 26, 1946, leaving a will by which Lwella D.
        Stalder inherited the sum of $1.X,127.  It is established
  .     .




Hon. Robt. S. Calvert,    Page 3 (V-1005)




       by the evidence that the mother of Luella D. Staider
       died when the latter was approximately      three years of
       age.   Immediately    thereafter Luella  D.  Stalder was
       taken into the home of her paternal uncle, M. L. Dow-
       ell, where she resided with her uncle and his wife,
       Hattie L. Dowell.    She was treated as a daughter from
       that time onward and she thereafter     treated the Dow-
       ells as her parents.    She remained in the home of the
       Dowells until she married at the age of 28. The rela-
       tionship continued until the time of the death of Hattie
       L. Dowell.”

             The lower court had allowed an exemption of $10,000
in assessing  the inheritance tax as provided in Section 77-2004
(R.S. 1943) of the Nebraska statute.  That section reads in part as
follows:

              “When the beneficial  interest to any property or
      income therefrom     shall pass to or for the use of any
      father, mother,   husband, wife, child, brother,     sister,
      wife or widow of the son, or husband of the daughter,
      or any child or children adopted as such in conformity
      with the laws of the State of Nebraska,     or to any per-
      son to whom the deceased     for not less than ten years
      prior to death stood in the acknowledged      relation of a
      parent, or to any lineal descendant     born in lawtul wed-
      loEk,in   every such case the rate of tax shall be one dol-
      lar on every one hundred dollars * * 4: in excess of ten
      thousand dollars received by each person.”        (Emphasis
      added.)

               It was argued that the fact that Luella D. Stalder pre-
sumably    received a $10,000     exemption    under the above quoted
section in her mother’s     estate and that she would be entitled to an-
other $10,000     exemption in her father’s     estate at the time of his
decease precluded the allowance of the exemption in the case under
consideration.     In support of this argument it was urged that the ap-
plication of the provision relating to persons to whom the deceased
for not less than ten years prior to death stood in the acknowledged
relation of a parent applied only to illegitimate        children.   The court
refuted this contention,    pointing out that it was inconsistent        with
other specific Nebraska      statutes relating:to    the status of illegiti-
mate children,     and further stating that had it been the legislative
intent to so restrict    the meaning of this portion of the statute, it
would have been a simple matter to have expressly             so stated. Like-
wise, the court refused to limit possible exemptions           to exemptions
from each of two parents,       saying that such limitation       must come
from the Legislature,     not the courts.
Hon. Robt.   S. Calvet,   Page 4 (V-1005)



              We think the above summaries         disclose   that neither
the order of the County Court of Platte County nor the decision in
In re Dowell’s   Estate purports to give the beneficiaries         the status
of adopted children of the decedent.       In neither is anyone declared
to be an adopted child of the deceased foster parent.            In both the
beneficiary   is simply declared to come within the applicable clas-
sification  of the Nebraska statute,     that is, within that provision
which allows the most favorable classification          “to any person to
whom the deceased for not less than ten years prior to death stood
in the acknowledged      relation of a parent.”    Class A (Art. 7118) con-
tains no similar provision for foster children.          Moreover    the pro-
vision for adopted children is expressly        limited to “legally adopted”
children.   Opinion No. O-5457 of this office construed this phrase
as meaning children adopted in compliance          with the adoption stat-
utes in force and effect at the date of the alleged adoption.          Under
this construction,   even if the facts presented were sufficient to war-
rant the conclusion    that an adoption or adoptions by estoppel         had
been accomplished,      such conclusion would still not satisfy the stat-
utory requisite of “legal” adoption.      Therefore     neither Mrs. Taylor
nor Mr. Naumann can be given Class A classification             but must be
classified  under Class C (Art. 7120).

                                 SUMMARY

              Order of Nebraska County Court, assessing      in-
      heritance taxes and ftnding niece and nephew of dece-
      dent were persons to whom decedent for not less than
      ten years prior to death stood in the acknowledged      re-
      lation of a parent, does not give the niece and nephew
      the status of adopted children of the decedent.      Said
      niece and nephew cannot be given Class A (Art. 7118,
      V.C.S.)   classification for inheritance tax purposes.
      but must be classified    under Glass C (Art. 7120, V.C.S.).

                                       Yours   very   truly,

                                       PRICE DANIEL
                                      Attorney General


APPROVED:                              BY   Mrs.   Marietta    MeGre
W. V. Geppert                                                          Assistant
Taxation Division

Charles D. Mathews
Executive Assistant

MMC/mwb
