Honorable George H. Sheppard                             v-y,    I
Comptroller of Public Accounts
Austin, Texas
Dear Sir:
                             Opinion No. 0-41Q9
                             Re: The application of the
                                  Texas Inheritance Tax
                                  Law to a situation where
                                  an individual devises by
                                  will all the community
                                  property belonging to hlm-
                                  self and to his surviving
                                  wife. The property is all
                                  devised to the certain
                                  named beneficiaries with
                                  the exception of a $2400.00
                                  annuity which is given to
                                  his surviving spouse. How
                                  much of such property re-
                                  ceived by the certain named
                                  beneficiaries Is subject to
                                  the inheritance tax.
          We are in receipt of your letter of October 8, 1941,
in which you request the opinion of this department upon the
question set out therein as follows:
         "S.E. McKnlght died a resident of Dimmlt
    County on September 24, 190, testate, seized
    and possessed of a community estate that had
    a net value of $292,574.46.  The undivided one-
    half interest of the deceased is valued at
    $146,287.23, and accordingly an inheritance
    tax report was made on this basis.
         "An examination of the will of the de-
    ceased reveals that after certain special
    bequests, the testator disposes of his entire
    community estate of himself and surviving wife.
    The residuary estate is devised in trust to
    three trustees for a period of ten years, or
    until the death of the surviving wife. The
    wife is to have the use of the homestead and
Honorable George Ii.Sheppard, Page 2


    and household furnishing and an annuity
    of $2,400.00 per year for life and the
    corpus of the trust passes to seven r.ieces
    and nephews at the expiration of the trust.
          "Item 2 of the will contains this language:
         "'All property that I now possess
    or that I probably will possess at the
    time of my death is community property
    between me and my wife, Della McKnlght.
    It is my intention by this will to dis-
    pose of all said property, my wife's
    part as well as my own, and I hope that
    she will accept the provisions herein
    made for her in lieu of her community                    I

    interest in said property. . .'
           "The surviving wife, by this clause,
    was put to her election either to take
    this property under the will or to re-
    pudiate ssme and claim her one-half
    interest   in the community property. She
    elected to take under the will and the
    question arises over the correot method
    of distribution thereunder and the compu-
    tation of the Inheritance tax thereon.
          "!Pheexecutor of this estate reported
     only one-half value, ($146,287.23), and
     distributed same to the seven nieces and
     nephews and computed the tax thereon.
          "On the other hand, should we include
     for tax purposes the total value of the
     community estate ($292,574.46), less the
     life estate in the homestead and household
     furnishings and the $2,400.00 annuity to
     the wife and distribute the residue to the
     seven nieces and nephews and compute the
     tax thereon."
          Under the facts you submit there can be no question
but that the testator has devised all of the community estate
belonging to himself and to his surviving wife. Also you ad-
vise that the surviving spouse has elect.edto take the annuity
set up for her by the will of the testator along with the other
rights given her under the will. Under the facts you submit
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Honorable George H. Sheppard, Page 3


the value of the entire community estate is $292,574.46.
You advise also that the attorney for the estate has sub-
mitted only one half of said amount as taxable under the
Texas Inheritance Tax Law contending that such amount repre-
sents the decedent's interest in the community property and
therefore that is all that is taxable upon the passing to
the named beneficiaries. Under the facts also, the surviving
spouse having elected to take under the will the actual value
of the estate that will pass to the other devlsees is an
amount much greater than the one half community estate re-
ported by the attorneys for the estate for Inheritance tax
purposes. Under the will of the testator the corpus of the
estate was left in trust to certain relatives of the sur-
viving spouse with the exception of the portion set aside
for said surviving spouse therein.
          Article 7117, Revised Civil Statutes, provides in
part as follows:
             "All property within the jurisdiction
        of this State, real or personal, corporate
        or Incorporate, . . . whlah shall pass abso-
        lutely or in trust by will or by the laws of
        descent or distribution ofsthis or any other
        State, or by deed, grant, sale, or gift made
        or Intended to take effect In possession or
        enjoyment after the death of the grantor or
        donor, shall, upon passing to or for the use
        of any person, corporation, or assoclatlon,
        be subject to a tax for the benefit of the
        State's General Revenue Fund, in accordanze
        with the following classification. . . .
        (Underscoring ours)
          The question In this case then resolves itself
down to this: The testator's share of the communit estate
which he passed to the devlsees is valued at $146,2g7.23
and the value of the property actually received by the
devlsees due to the will and the election by the surviving
spouse is a sum greater than said testator's community half
of the estate; therefore should the inheritance tax be
assessed against the $146,287.2x estate or should It be
assessed against the value of the entire est.atebeing re-
ceived by the devisees other than the surviving spouse?
          The Texas Inheritance Tax is a privilege tax
being levied on the privilege of receiving or succeeding
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Honorable George H. Sheppard, Page 4


to property which passes under the conditions named In
Article 7117, supra. See the case of State v. Hogg, 72 S.W.
(2d) 593.  The question In this case then depends upon what
property passed to the devisees under the will of the de-
ceased. All property so passing under the will absolutely
or In trust to the deviaees Is subject to the tax. The
answer to this question Involves the doctrine of election
announced bv the courts of this State. The doctrine was
well stated-by the Supreme Court of Texas In the case of
~skan v. Daksn, 83 S.W.(2d) 620.  The court stated as follows:
          "As early as 1859, the Supreme Court of
     this state, in the case of Phllleo v. Holllday,
     et al, 24 Tex. 38, in discussing the doctrine
     of an election under a will, announced the fol-
     lowing rule: 'The principle of election is,
     that he who accepts a benefit under a will,
     must adopt the whole contents of the instru-
     ment, so far as it concerns him; conforming to
     its provisions, and renouncing every right ln-
     consistent with it; as where the wife claims
     something under the will which will disappoint
     the will."'
          The court went further and declared the effect of
an election upon the rights of the surviving spouse to be
as follows:
           "The law does not permit the husband to
     devise either separate property or community
     property of the wife, without her consent; but
     if he attempts to do so, and she accepts under
     the will, as devisee, rights she would not
     otherwise be entitled to, she is estopped from
     questioning the disposition of her property
     upon the doctrine of election. Smith v. Butler,
     85 Tex. 126, 19 S.W. 1083; Gllroy v. Richards,
     26 Tex.Clv.App. 355’ 63 S.W. 644;  Rogers v.
     Trevathan, 67 Tex. 406, 3 S.W. 569; Chase v.
     Qregg, aa Tex. 552, 32 s.w.  520; Lee v.
     McFarland, supra; Speer'e Martial Rights,
     8 323, P* 399.”
          The Supreme Court of Texas in the case of Moss v.
Helsley, 60 Tex. 426, stated as follows:
Honorable George H. Sheppard, Page 5


          "If, however, he should by will dispose
     of her community interest or separate property,
     and she should elect to take under the will,
     then she would be estopped from claiming against
     the will under which she had elected to take by
     asserting her separate or community right to the
     property."
          It is also a well settled rule of law In this
State that the fact that the surviving spouse receives
under a will an estate of less value than the one half
share of the total community estate owned by her and the de-
cedent does not affect.the legal application of the rule of
election. In the case of Dunn v. Vlnyard, 251 S.W. 1043,
the Commission of Appeals of Texas stated as follows:
                 To uphold an election the compensat-
     ing thing need not be of value equal to that
     taken away. Smith v. Butler, 85 Tex. 130, 19
     S.W. 1083. It may be, and often is, true that
     the party making the election Is prompted to do
     so by considerations other than the value of
     the estate or property actually received under
     the will. Some of the dlfflcultles usually
     encountered In cases of this kind are avoided
     by reason of the explicit language of the will
     itself. Item eleventh expressly declares that
     it is the purpose to dispose of the whole of
     the community estate, and Mrs. Dunn is express-
     ly advised that she Is put to an election."
To the same effect see the case of Bumpass v. Johnson, 290
S.W. 739, by the Commission of Appeals.
          In the case of Jones v. State, 5 S.W. (2d) 973,
the Commission of Appeals of Texas was confronted with a
fact situation where an Individual had died leaving a will
disposing of the community estate of himself and his sur-
viving spouse. In that case the surviving spouse had re-
ceived under the will of the decedent an estate equal In
value to her one half share of the total community estate.
The surviving spouse elected to take under the will and
the State assessed an inheritance tax against her based
on the amount given her under the will. The court held
that since the amount so received by her under the will
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Honorable George H. Sheppard, Page 6


was less or not In excess of the amount that she owned as
a one half community estate in the total estate that no ln-
herltance tax was due. The court held that the tax was not
due becausetie will passed no property to the surviving
spouse. The court stated as follows in this connection:
          "NOW If the surviving widow owned in her
     own right an undivided one-half Interest in the
     community property of herself and husband, then
     she had title to that extent to such property,
     and, If the will of deceased did not pass any
     property to her, clearly she is not taxable.
     The will did not pass any property whatever to
     her, because it operated only as an effective
     partition of the community property after
     death. . - *"
          Under the doctrine of the case of Jones v. State,
supra, it is necessary to determine the value of the property
that in this case passes uhder the will to the devlsees.
There can be no question but that under said case the amount
received under the will by the surviving spouse here Is not
subject to an Inheritance tax because the value of the ssme
Is less than the one half community estate she had in the
total estate.
          As to the other devlsees, however, we are of the
opinion that under the law all the remainder of the property
passed to them under the will of the decedent and that the
Inheritance tax Is to be based on the total value so passing
to them and not based upon the value of only the one half
community interest of the testator In the total estate. We
believe this to be true because we believe that all the re-
mainder of the property of the entire community estate passed
under the will of the testator to the remaining devisees, the
surviving spouse having elected to take under the will. We
believe this point is settled by the case of Kelly v. Kelly,
294 S.W. 518, by the Commission of Appeals of Texas. In
that case an Individual by will disposed of the entire com-
munity estate belonging to him and to his surviving spouse.
Under the will the decedent gave all of his property to his
wife to fully control for the use of the family. The will
also provided that the surviving wife should execute a deed
of gift to one of the decedent's seven children of 68 acres
of the land being a part of the community estate. The will
further provided that at the death of the surviving wife the
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 Honorable George H. Sheppard, Page 7


 remainder of the property should be divided equally among
 the six other children of the testator. Subsequent to the
 testator's death the surviving wife executed the deed of
 the 68 acres of land to the son so designated. Several
 years later the surviving wife died without having disposed
 of the balance of the community land owned b her and her
 husband. The son which had been given the 6 isacres of land
 by the deed but which had been left out of the provision in
 the will of the testator which disposed of the remainder of
 the property after the death of the survlvlng wife claimed
 a one-fourteenth undivided interest in the remainder of the
 property as the heir of his mother. The court held that the
 children took the property and derived their title under
 the original will of the husband and not as heirs of their
 mother. The court stated as follows:
              "This will disposes of the community
         estate of G. S. Kelly and Julia Kelly. It
         vests legal title to the community estate
         in the wife for the use and benefit of the
         family. It directs that she convey the 68
         acres of the community estate to R. E. Kelly,
         and that the property remaining at the ter-
         mination of the trust be divided equally
         between his other,six children. The wife
         elected to accept under the will, and faith-
         fully performed the trust. The wife and
         children took under the will, and the
         children took no part of the community estate
         by Inheritance from their mother."
           The Austin Court of Civil Appeals In the case of
 Kerens Nat. Bank v. Stockton, 281 S.W. 580, reversed by the
 Supreme Court on other grounds, stated as follows:.
              "We are of opinion that upon the upon
         the election of the children to take under
         the will their one-half Interest In the 275
         acre tract became wholly the property of the
         testator for all purposes to which his estate
         under the law and under the terms of the will
         might begsubSeated, and that such ownership
         dated back to the ilateof his death."
         (Underscoring ours)
           See also the case of Grange v. Kayser, 80 S.W. (2d)
 1007, In which the El Paso Court of Civil Appeals held that
 where an individual died and by will disposed of all of the
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Honorable George H. Sheppard, Page 8


community estate and the wife, having elected to take there-
under, subsequently attempts by quitclalm deed to convey her
interest to another, title passed by the terms of the will
and the quitclaim deed passed no title to or interest in the
property.
          We believe that these cases conclude the proposi-
tion that where as in our case sn individual attempts to
dispose of the entire community estate belonging to himself
and to his surviving spouse that if the surviving spouse
elects to take under the will title to all of the property
passes under said will and the devisees derive their title
from said will of the testator. Applying that rule to the
facts In our case all of the property which now passes to
the devisees other than the surviving spouse is property
which passes to them in trust by will of the testator.
Under the plain terms of Article 7117, supra, all of the
property so passing In trust under said will Is subject to
the Texas Inheritance Tax.
          We trust that the foregoing fully answers your
inquiry in this matter.
                              Yours very truly
APPROVED OCT 22, 1941         ATTOF3NEYGRNRRADOF TEXJLS


Grover Sellers                BY
FIRST ASSISTANT                        Billy Goldberg
ATTORNEY QENERAL                            Assistant

l?G:LM
ENCLOSURES


                                       APPROVED
                                        OPINION COMMITTRR

                                       By   BWB
                                            Chairman
