Attorney General Opinion WW-0277

THEA~~~ORNEY GENERAL OFTEXAS October 15, 1957 Hon. Robert S. Calvert Opinion No. WW-277 Comptroller of Public Accounts Capitol Station Re: Austin 11, Texas Legality of refunding 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. d The value of the net taxable estate is $355, 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-uch non-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 ,to return." The above definition was Stone v. Phillips, 171 S.W. 2d 156 uoted by the Court in 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 ,oS Mrs. 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,ts are 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 shoulc1 determin? 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;r charged 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,a taken into the Treasury, togetJh..er vkth the actual rexittancr which the Treasurer shall cash anti place in his vaults or 9n legally authorized d,ePository banks,if the necessity arises. . . 0 A deposit receipt shall ‘be issued 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 MMP,'fb APPROVED: WILL WIisON Attorney General By: */ Assistant OPINION COMMITTEE George P. Blackburn, Chairman W. V. Geppert B. H. Timmins John B. Webster REVIEWED FOR THE ATTORNEY GENERAL Ey: James N. Ludlwn