Flournoy v. Felat

Opinion

JEFFERSON, J. Houston I. Flournoy, State Controller, appeals from an order of the trial court sustaining the objections of Susan Felat, executrix, and. Security Pacific National Bank, trustee, in respect to the determination of inheritance tax due in regard to the estate of Ruth R. Kingman, deceased.

Ruth R. Kingman (hereinafter referred to as the decedent) died testate [222]on or about May 6, 1970, a resident of Los Angeles County. Her small probate estate passed to- Susan Felat and the tax applicable thereto is not at issue herein. However, the decedent was also the life beneficiary of a testamentary trust established by the will of her predeceased husband, Walter R. Kingman, who died on November 25, 1954, then also a resident of Los Angeles County. Security Pacific National Bank was at that time established as and continues to be trustee of the testamentary trust pursuant to Walter R. Kingman’s will.

Walter R. Kingman bequeathed all the community property remaining at his death, both his own share and that of his wife (decedent herein) in trust to Security Pacific National Bank subject to the exercise of his wife’s election to take her separate share outright or to take a life estate in the entire community subject to the trust under his will. Decedent elected to take under his will, thereby placing her share of the community property in trust; accordingly, distribution of the entire estate was made to the trustee bank.

The report of the inheritance tax appraiser in the Walter R. Kingman estate assessed inheritance tax to the remaindermen named in the trust of the Kingman property thus established, in conformity with the policy then followed by the State Controller, in the total amount of $2,076.07. No objection was made to this report and the court made its order determining inheritance' tax in accordance with the inheritance tax appraiser’s report. The inheritance tax thus computed was based on the transfer to the remaindermen of the total value of the remainders in the community property interest of the present decedent as well as in the community property interest of Walter R. Kingman.

Upon the death of the present decedent the inheritance tax appraiser filed his report with the court assessing a tax on the small probate estate transferred to Susan Felat and a tax on the portion of the Kingman property passing to the remaindermen, the same as those named before. However, in so doing, the inheritance tax appraiser computed the total tax and made an adjustment to take into- consideration the difference due to recomputation of the tax originally made in the Walter R. Kingman estate. This method of computation was based on the principles enunciated in a decision of the Court of Appeal rendered May 19, 1965, subsequent to the distribution of the Walter R. Kingman estate. (Estate of Carson, 234 Cal.App.2d 516 [44 Cal.Rptr. 360].)