Untitled Texas Attorney General Opinion ( 1957 )

THEA~~~ORNEY GENERAL
OFTEXAS
October 15, 1957
Hon. Robert S. Calvert Opinion No. WW-277
Comptroller of Public Accounts
Capitol Station Re: Legality of refunding
Austin 11, Texas inheritance taxes de-
posited ursuant to
Article fl
388, V.C.S.,
if decedent is a non-
Dear Mr. Calvert: resident of Texas.
We quote the following excerpts from your letter
requesting our opinion on the above-captioned matter.
"Clara S. Kelly died on February 6, 1957,
and an inheritance tax report was filed with
this Department on or about May 2, 1957, for
her estate by Joseph C. Jackson, an accountant
of Austin. The report states the decedent was
a resident of Travis County upon the date of
her death. fiis report was sworn to by Eugene
J. Kelly, son of Clara S. Kelly. The value of
the net taxable estate is $355,d lg.33 consist-
ing almost entirely of stocks and bonds located
in a safety deposit box in the American National
Bank of Austin. The only other property in
which the decedent had a taxable interest was
a life estate in a small house and lot valued
at $5,000.00 in Alhambra, California, and a
bank account of $1,030.00 in The California
Bank of Alhambra.
"Mr. Jackson was anxious to obtain waivers
of the inheritance tax lien on all the stocks
and bonds at an early date, so a hurried report
was made which reflected a tax due of $5,379.82.
Since the report was hurriedly made and we had
no opportunit to make an early examination, we
accepted the % 5,379.82 and placed same in our
departmental suspense account as provided in
Article 4388.
Hon. Robert S. Calvert, page 2 (WW-277)
"The State of California is now asserting
a tax on this entire estate claiming the de-
cedent was a resident of California at the
time of her death.
"Mr. E. H. Smartt, Austin Attorney, has
written us a letter in which he reaches the
conclusion that the decedent was a resident
of California and asks for a refund of the
tax now in our suspense account.
"On the facts as stated in this letter and
those given by Mr. Smart%, please advise this
Department as to the domicile of this decedent.
If you hold this decedent was a resident of
California, also advise if this Department can
legally refund said tax."
In addition to the facts set forth in your letter,
we quote the following facts from Mr. Smartt's letter.
"A short history of Clara Sabrina Kelly
would probably be helpful in determining the
issues in question. Mrs. Kelly was originally
a resident of the State of Ohio; her husband
died about the year 1938, and thereafter she
traveled between Ohio and California. Mrs.
Kelly had two daughters living in Ohio and a
son, Eugene J. Kelly, who moved to Austin,
Travis County, Texas, from Kansas about 1942.
In about 1938 or 1939, Mrs. Kelly went to
California and bought a little home in Alhambra,
and in 1942, she deeded this home to her five
grandchildren retaining a life estate in herself.
In 1942 she went back to Ohio and stayed some
time, and in 1943, she came to Austin to live
with her son, Eugene J. Kelly. Except for the
property located in Alhambra, California, her
estate consisted entirely of stocks and bonds,
all of which she had delivered to her son,
Eugene J. Kelly, and gave him a power of attorney
with full authority to manage and control all
of said stocks and bonds.
. I
- .-.
Hon. Robert S. Calvert, page 3 (W-277) . .’
Mrs. Clara Sabrina Kelly, by
instn;uhe&'dated September 21, 1943,
executed an elaborate trust agreement In
which she designated her son, Eugene J.
Kelly, as her trustee, with full power
over her entire estate to manage and con-
trol the 88186 for her benefit during her
lifetime, and in this ‘GNst agreement she
reafflrmed her will which had previously
been made. In the latter part of 1943,
Mrs. Kelly went back to California, she
being then past eighty-three years of age,
and never left Alhambra, California, until
her death; after her death her body was
taken to Ohio for burial.
"By instrument dated May 11, 1949, Mrs.
Clara Kelly revoked her will and stated that
it was her full and deliberate Intention not
to have any will In effect at the date of
her death; so far as we have been able to
ascertain this instrument of revocation
was the last legal instrument ever signed
by her.
II. . .
"Probate proceedings were filed in Travis
CounCy under Section 180 of the new Probate
Code, for the purpose of having the court de-
termine that no necessity existed for adminis-
tration and also for the purpose of declaring
the helrshfp of Clara Sabrina Kelly. This
action was taken solely for the purpose of pro-
viding a vehicle for the transfer, or sale, of
the stocks and bonds which were carried in the
name of Rugene J. Kelly, Trustee, for the estate
of Clara S. Kelly. We Court found that no
necessity existed fox.administration and found
also that the estate belonged to the two
daughters in Ohio and the son in Texas, share
and share alike.
"Since the latter part of 1943, all business
transactions concerning the stocks and bonds be-
longing to Mrs. Clara Sabrina Kelly have taken
place In Austin, Travis County, Texas, and such
transactions have been handled by her son,
Hon. Robert S. Calvert, page 4 (WW-277) /
Eugene J. Kelly. The stocks and bonds
were kept in a safe deposit box at the
American National Bank, In Austin, and
all dividend8 were payable to Eugene J.
Kelly, TNStee. All Income tax returns
were filed by the son with the Internal
Revenue Department in Austin, Texas.
/m ese income tax returns showed the
residence of the beneficiary of the trust,
Mrs. Kelly, as being Austin,Texasif All
bills of Mrs. Clara Sabrina Kelly were
forwarded to Eugene J. Kelly, in Austin,
Texas, and payment made through a bank ac-
count established and maintained in the
American National Rank in Austin.
"We have been unable to find any
written evidence of an Intention on the
part of Mrs. Clara Sabrina Kelly to re-
turn to Austin, Texas, and in talking
with neighbors in Alhambra, California,
we have been unable to find any statement
by her expressing such intention."
We have been furnished with the following instru-
ments*
of Cita~~lnApplication to Probate Court; (2) Two Yc$veTrs
; (3) Copy of Order of Probate Court; wo
copies of Power of Attorney; (5) Copy of Trust Agreement;
and (6) Copy of Revocation of Will.
The application to the Probate Court states that
the decedent died while in the State of California and
at the time of her death had her resident in Travis County,
Texas.
The trust instrument embodied a will (subsequent-
ly revoked) in which the decedent recited that she was a
resident of the County of Los Angeles, State of California.
The Power of Attorney likewise recites that the
decedent was a resident of Alhambra, California. The
Revocation of Wills executed at Alhambra, California,
May 11, 1949, contains no recitation as to residence.
Article 7117, Vernon's Civil Statutes, reads,
in part,as follows:
.
_ .-
Hon. Robert S. Calvert, page 5 (WW-277)
"All property within the jurisdiction
of this State, real or personal, corporate
or incorporate, and any Interest therein,. . .
whether belonging to inhabitants of this
State or to persona who are not lnhabi-
tants. . . which shall pass . . . by the
laws or ,@g descent or distribution. . .
shall upon passing . . . be subject to a
tax. . . in accordance with the following
classification; provided, however, that the
tax imposed by this Article in respect to
personal property of non-residents (other
than tangible property having an actual
situs in this State) shall not be payable:
(1) if the grantor or donor at the time of
his death was a resident of a State or
territory of the United States which, at
the time of his death, did not Impose a
transfer or inheritance tax of any character
fn respect of personal property of residents
of this State (other than tangible personal
property having an actual situs in said
State); or (2) if the laws of the State
or territory of the residence of the grantor
or donor at the time of his death, contained
a reciprocal provfsion under which non-
residents were exempted from transfer or
inheritance taxes of every character in
respect to personal property (other than
tangible personal property having an actual
situs therein) provided the State or terri-
tory of residenoe of s-uchnon-residents
allowed a similar exemption to residents
of the State OP terrltorJ of residence of
such a grantor or donor.'"
Stock and bonds are intangible personal property.
Since California does not tax the Intangible property of
non-resident decedents who were residents of a State or
Territory of the United States, no taxes would be due
the State of Texas in this case if Mrs. Kelly was domiciled
in California at the time of her death.
me following definition of 'domicile" is given
In 28 C.J.S. 1, Domicile, Sec. 1:
"Domicile is the legal conception of
home, and the relation created by law be-
tween an individual and a particular
Ron. Robert S. Calvert, Page 6(w-277)
locality or country. The term has been
variously define& the definitions agree-
ing substantially on the elements of a
true,Sixed home, habitation or abode,
where a person intends to remain permanently
or IndefInItely, and to which, whenever
absent, he intends ,toreturn."
The above definition was uoted by the Court in
Stone v. Phillips, 171 S.W.2d 156 Tex. Civ. App. 1943,
aSSrd'9 2 Tex. 216, 176 S.W. 2d % 1944).
322
.-
The acquisition of a domicile of choice is en-
tirely a question of residence and intention. In other
words, to have effected a change of domicile from Ohio
to California there must have been an actual residence in
California and an intention on the part ,oSMrs. Kelly to
remain there or to mske it he' home. It is not necessary
that the Intention to acquire a new domicile should exist
at the time of initial residence,but such intention may be
formed thereafter. Tne foregoing general principles are
supported by the authorities contained in 28 C.J.6. 11-14,
Domicile, Sec. 9.
Assuming that the Sacts which have been furnished
you are true, it appears to us, primarily from the fact
that Mrs. Kelly was in Texas, living in the home of her son,
for less than a year, that Mrs. Kelly was a resident of
California; hoPever, the Sac,tsare sufficiently conflicting
in this case that we cannot say as a matter of law that Mrs.
Kelly was domiciled in CaliFornia. This office does not
pass upon questions of fact.
IS you shoulc1determin? that Mrs. Kelly was domicil-
ed in California, we have o~nciuG!o that you would be author-
ized to ref+unci
the money in view of the provisions of Article
4308, V.C.S., which xsads fn part as follows:
"The State Treasurer shall receive daily
Srom the head of each Department, each of
whom is speciall;rcharged with the duty of
making sane daily, a detailed list of all per-
sons remitting money the status of which is
undetermined or which is awaiting the time
when it can finally b,ataken into the Treasury,
vkth the actual rexittancr which the
togetJh..er
Treasurer shall cash antiplace in his vaults
or 9n legally authorized d,ePositorybanks,if
the necessity arises. . . 0 A deposit receipt
shall ‘beissued by the ComPtroller forthe
-, .
. . .-
Hon. Robert S. Calvert, sage 7(m-8’7)
daily total of such remittance from each
Department; and the cashier of the
Treasurer's Department shall keep a cash
book, to be called lsuspense cash bcok,'
in which to enter these deposit receipts,
and any others issued for cash received
for which no deposit warrants can be issued,
or when their issuance is delayed. As soon
as the status of money zo placed with the
Treasurer on a deposit receipt is determined,
it shall be transferred from the suspense
account by placing the portion of it belong-
ina to the State in the treasury by the
issuance of a deposit warrant, and-the part
found not to,belong to the State shall be
refunded." (&phasis supplied)
CONCLUSION
Since this office does not pass upon questions
of fact, and since in this case the submitted facts per-
taining to the decedent's domicile are conflicting, we
are unable to advise you as to the domicile of the dece-
dent. Should you determine that the decedent was domiciled
in California, you would be authorized under Article 4388,
V.C.S., to refund the inheritance taxes heretofore paid.
Very truly yours
WILL WIisON
Attorney General
By: */
MMP,'fb Assistant
APPROVED:
OPINION COMMITTEE
George P. Blackburn, Chairman
W. V. Geppert
B. H. Timmins
John B. Webster
REVIEWED FOR THE ATTORNEY GENERAL
Ey: James N. Ludlwn