Honorable Robert S. Calvert        Opinion Ro. C-100
Corn&roller of Public Accounts
Capitol Station                    Re: Proper classification
AustIn, Texas                          for inheritancetax
                                       purposes of adopted
                                       children of an adopted
                                       daughter of the dece-
Dear Rr. Calvert:                      dent.
       We quote the following excerpt from your letter requesting
the opinion of this office on the above captionedmatter:
            “We desire the opinion of your office
         with respect to the proper classification
         for Inheritancetax purposes of the adopted
         children of an adopted daughter of a dece-
         dent.
            “B. 0. Lindsey died testate a resident
         of Jasper County, Texas, on December 29,
         1961, and under his last will and testa-
         ment he devised the entire estate with the
         exception of some small special bequests,
         a life estate to his wife, Mrs. Hattie E.
         Lindsey, and the remainder to Qeorgla Davis
         and Frederick Davis, the children of an
         adopted daughter.’
       In this connection you have advised us that the adopted
daughter’s children were adopted in 1956. For the purposes
of this opinion It is assumed that all three adoptions were
consummated in accordancewith the adoption statutes then In
effect.
        If the adopted children of the adopted daughter cannot
coqe within the provisions of Article 14.02 - Class A - ,
Chapter 14, Title 122A, Tax.-@en., Vernon’s Civil Statutes,
they must be classifiedunder the less favorable provisions of
Article  14.06 -mClass E -; suma. Article 14.02 reads in part
as follows:
             "If passing to or for the use of
          husband or wife, or any direct lineal
          descendant of husband or wife, or any

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Honorable Robert S. Calvert, Page 2          Opinion No. C-100


          direct lineal descendant or ascendant of
          the decedent, or to legally adopted
          child or children, or any direct lineal
          descendant of adopted child or children
          of the decedent, or to the husband of
          a daughter, or the wife of a son, the
          tax shall be. . . ."
       In view of the decisions of our courts, it might be
possible to accord this favorable classificationto the
adopted children of the adopted daughter under the provisions
for “any direct lineal descendant or ascendant of the dece-
dent.’ However, the more readily applicableprovision is
that for “any direct lineal descendant of adopted child or
children of the decedent.”
       In order to qualify for the preferred tax treatment
accorded persons enumerated in Class A, two contrary argu-
ments must be overcome. The first is that Article 14.02
specificallydistit$guishes “direct lineal descendants”from
“adopted chiltren. Likewise, although the statute specifi-
cally places      .any direct lineal descendant. .of the de-
cedent " in thi &me category with "legally adopt;?dchild or
children” of the decedent, there is no provision for the
legally adopted child or children of an adopted child of the
decedent; rather the statute specificallylimits its classifl-
cation to "any direct lineal descendant of adopted child or
children of the decedent." Thus, on its face the statute
indicates an intention to treat an adopted child or children
of an adopted child of a decedent differentlyfrom direct
lineal descendants of such adopted child or children of the
decedent.
       The second obstacle lies in the fact that ordinarilv
the class "direct lineal descendants"does not include adopted
children. State v. Yturria, 109 Tex. 220, 204 S.W. 315 1918),
and Decker v. Williams, 2151S.W.2d 679 (Tex.Clv.App.194A, error
ref.} are two inheritancetax cases which recognize this prlncl-
pie..
       The Court in the Yturria case said that “direct lineal
descendant"meant naturamring.         Neverthelessthe Court
held that the decedent's legally adopted children came within
the exemption then provided by Article 7487, R.S. (1911) for
"direct lineal descendants"of the decedent, because under
the terms of the adoption statutes, adopted children were
entitled to the same rights and privileges as natural children
with respect to that which passed to them upon the death of
the adoptive parent without Issue of his bqdy. The court

                           -493-
Honorable Robert S. Calvert,,Page,
                                 3           Opinion Ho. C-100


pointed out that under the civil law; adopted persons and
their children were given the same legal status as natural
children and grandchildrenbut that the applicable Texas
adoption statutes specificallylimited the rights and privi-      '
leges of~the adopted child. The Court said at page 316:
             II
              . . .Our statute, however, defines
          with precision the rights and privileges
          to which a party shall be entitled by
          virtue of adoption. These rights and,
          privileges are, under article 2, R.S.:
            "'All the rights and privileges,
         both in law and equity of a legal heir
         of the party so adopting him. . . .I'
       However, the Court In the Yturria case refused to allow
an exemption for the property whimed       under the will to
the children of the adopted children, because "we do not feel
warranted in extending to others the rights and privileges,
which are confined by the adoption statutes to the adoptive
person." 204 S.W. at p. 317.
       In the Decker case the Court was concernedwith the proper
classificationmheritance       tax purposes of a legally adopted
daughter of the decedent's first wife who had predeceased him
and with the classificationof two children of the first wife's
adopted daughter. The~adoptionhad taken place in 1928. Class
A classificationwas accorded the adopted child of the dece-
dent's first wife on the ground that the phrase "direct lineal
descendant"must be given the same meaning when applied to
"husband or wife" as when applied to the decedent under the
prior act in the Yturria case. However, the adopted child's
children were den-as       A classification. It is evident
that in both the Yturria case and the Decker case favorable
classificationfomitance        tax purposes was predicated
upon the rights and privileges of heirship accorded by the
adoption statutes in force at the date of the adoption of the
beneficiary.
       Another case which predicated a determinationof proper
classificationfor inheritancetax purposes on the rights of
heirship resulting from adoption is Farrler v. Calvert, 315 S.W.2d
40 (Tex.Civ.App.1958, error ref. n.r.e.). In this case the
court held that the adoptive mother of a deceased child, uho
had been adopted by a deed of adoption on February 2, 1925,
could not be regarded as a "dir ct lineal ascendant of the
decedent" for inheritancetax PFrposes. One of the reasons
for the court's decision was that under the adoption statutes

                           -494-
HonorableRobert S. Calvert, Page 4          Opinion No. C-100


in effect at the time the decedent was adopted no rights of
heirship were conferred upon the,adoptive parents.
       The problem we are presently consideringis the result
of the progressive enlargementof rights of adopted children
under the adoption statutes. The pertinent provisions of
the present adoption statutes, which were In force at the
time of the adoption of the beneficiariesin question, read
as follows:
            "Sec. 9. When a minor child Is
         adopted in accordancewith the provi-
         sions of this Article, all legal rela-
         tionship and all rights and duties
         between such child and Its natural
         parents shall cease and determine,
         and such child shall thereafterbe
         deemed and held to be for every
         purpose the child of its parent or
         parents by adoption as fully as
         though natural1 born to them in
         lawful d.
                wed oc .   . . For purposes
         of inheritanceunder the laws of
         descent and distributionsuch adopted
         child shall be regarded as the child
         of the parent or parents by adoption,
         such adopted child and its descendants
         Inheriting from and through the parent
         or parents by adoption and their kin
         the same as if such child were the
         natural legitimate child of such
         parent or parents by adoption, and
         such parent or parents by adoption
         and their kin inheriting from and
         through such adopted child the same
         as if such child were the natural
         legitimate child of such parent or
         parents by adoption. . . .'I Article 46a,
          V.C.S.

       In this present form, the provision Is significantly
different from the one quoted on pages 2 and 3 of this opinion
which was considered in the Yturrla and Decker cases. It
should be noted that the stanferremhe            old statutes
"as a legal heir of the party so adopting hiP1"has beef ckhaged
to that of a "naturallyborn child 'for all purposes.
Legislature Intended by these changes to broaden the application
of the adoption statutes beyond the restriction emphasized in


                           -495-
Honorable Robert S. Calvert, Page 5             Opinion No, C-100


the Decker case, viz. "as between the adopting parents and the
adopmild."
       In view of the foregoing, the adopted children in
question have become, for all purposes of Inheritance,the
natural children of the adopting parents. Since the decisions
which we have previously summarized in connection with our
Inheritancetax statutes have accorded favorable classlfica-
tion for Inheritancetax purposes based on the rights of heir-
ahip> we can only conclude that the children in this case
should be classifiedunder Class A.

                      SUMMA      R,Y
            The adopted children of an adopted daughter
      of a decedent are entitled to Class A classlflcatlon
      under the provisions of Article 14.02, V.C.S.
                                Yours very truly,
                                WAGGONER CARR
                                Attorney Qeneral of Texas


                                BY



                                      alLLd&-
                                      'RQordon Appletian
                                      Assistant Attorney Generals


APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman
J. H. Broadhurst
Ernest Fortenberry
W. E. Allen
J. S. Bracewell
APPROVED FORTHE~ATTORNEXQENERAL
By: Stanton Stone

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