IN RE: ESTATE of Ruth S. ZOOK

Reset A A Font size: Print

District Court of Appeal, First District, Division 3, California.

IN RE: ESTATE of Ruth S. ZOOK, Deceased. Alan CRANSTON, as State Controller, Petitioner and Respondent, v. Edgar T. ZOOK, as Executor of the Will of Ruth S. Zook, Deceased, Objector and Appellant.

Civ. 21326.

Decided: July 10, 1964

John E. Troxel, San Francisco, Pillsbury, Madison & Sutro, Eugene M. Prince, Noble K. Gregory, James F. Kirkham, San Francisco, for appellant. Charles J. Barry, Chief Inheritance Tax Attorney, Milton D. Harris, Asst. Inheritance Tax Atty., R. Edgar Sanderson, Associate Inheritance Tax Atty., San Francisco, for respondent.

This is an appeal from an order of the superior court fixing an inheritance tax. The order fixed the tax on bequests of a decedent to her grandchildren as if those bequests were made to strangers, because the grandchildren had been adopted by their stepfather.

The facts are not in dispute: Ruth S. Zook died in 1961. She was survived by her husband, a daughter Mary, a son Edgar, and five grandchildren, three the children of Mary and two the children of Edgar. Edgar was divorced. His former wife remarried and Edgar's children, by his consent, were adopted by their stepfather. By her will, Ruth S. Zook recognized Edgar's children as her grandchildren, notwithstanding their adoption, and left the same bequests to them as she did to the children of Mary. The controller classified Edgar's children as class D transferees (strangers) and classified Mary's children as class A transferees and computed their inheritance taxes accordingly. The superior court, after hearing, overruled objections to the inheritance tax appraiser's report and fixed the tax as reported.

The question presented is whether the bequests of Ruth S. Zook to Edgar's children are to be taxed as transfers to her ‘lineal issue’ (class A transferees pursuant to Rev. & Tax.Code, section 13307(a), or as transfers to strangers, (class D, Rev. & Tax.Code, section 13310).

Appellant first contends that the bequests to Edgar's children must be taxed as transfers to class A transferees because the children are ‘lineal issue’ of the decedent.

For inheritance tax purposes, the Revenue and Taxation Code defines a transferee as ‘* * * any person to whom a transfer is made, and includes any legatee, devisee, heir, next of kin, grantee, donee, vendee, assignee, successor, survivor, or beneficiary.’ (Rev. & Tax.Code, § 13306.) Transferees are classed as A, B, C or D. (Rev. & Tax.Code, sections 13307–13310.) Section 13307 reads in part: “Class A transferee' means any of the following: (a) A transferee who is the * * * lineal issue of the decedent.'

Appellant argues that adoption cannot alter a fact of nature; that Edgar's children are the decedent's natural grandchildren and are her ‘lineal issue’ within the meaning of Revenue and Taxation Code, section 13307(a) and hence are class A transferees.

The respondent contends, however, that since Edgar's children were adopted by their stepfather with Edgar's consent, they are no longer ‘lineal issue’ of their natural grandmother, Ruth S. Zook within the meaning of that term as used in Revenue and Taxation Code, section 13307(a) and hence must be taxed as strangers.

We think respondent's contentions are correct and that the trial court's order must be affirmed.

It cannot be disputed that the decedent's natural grandchildren are her ‘lineal issue’ if only the biological or genetic blood line is considered. But tracing the genetic line alone will not answer the question here presented. Whether one person is ‘lineal issue’ of another depends upon the legal definition of that term and hence upon the legal status of the persons involved. (Estate of Lima, 225 A.C.A. 512, 37 Cal.Rptr. 404; Estate of Auclair, 75 Cal.App.2d 189, 170 P.2d 29; Estate of Marshall, 42 Cal.App. 683, 184 P. 43.) Here, as we have seen, Edgar's children were adopted by their stepfather with Edgar's consent. That adoption resulted in a complete substitution of family and upon its consummation Edgar's children departed the Zook family and entered into the family of their adoptive parent, for all purposes.

Prior to the amendment to Probate Code, section 257 in 1955, upon adoption, the adopted child's status with regard to natural relatives other than its parents was not changed. After adoption it could inherit from its natural family other than its parents, and the natural family, other than parents, could inherit from it. (Estate of Calhoun, 44 Cal.2d 378, 282 P.2d 880.) In 1955, however, in part as a result of the decision in Calhoun, the Legislature amended Probate Code, section 247 to read: ‘An adopted child shall be deemed a descendant of one who has adopted him, the same as a natural child, for all purposes of succession by, from or through the adopting parent the same as a natural parent. An adopted child does not succeed to the estate of a natural parent when the relationship between them has been severed by adoption, nor does such natural parent succeed to the estate of such adopted child, nor does such adopted child succeed to the estate of a relative of the natural parent, nor does any relative of the natural parent succeed to the estate of an adopted child.’ The effect of the statute as amended, at least so far as intestate succession is concerned, is to substitute the adoptive family for the natural family. (See Estate of Serventi, 190 Cal.App.2d 514, 515, 12 Cal.Rptr. 206; Estate of Dolan, 169 Cal.App.2d 628, 629, 337 P.2d 498; Estate of Garey, 214 Cal.App.2d 39, 47, 29 Cal.Rptr. 98.)

Appellant contends, however, that the 1955 amendment to section 257 did not go beyond the field of intestate succession and that it has no application to bequests such as Mrs. Zook here made by her will to her natural grandchildren. We cannot agree. As we have noted, prior to 1955 Mrs. Zook could inherit from her grandchildren, despite their adoption, and they could inherit from her. Up to that time, in law as well as in fact, the Zook grandchildren were lineal issue of their grandmother. But that status was altered by the amendment to section 257. Adopted children lost the legal status upon which they formerly qualified as lineal issue of their natural grandparents. If, as appellant contends, Edgar's children remained ‘lineal issue’ of their natural grandparents notwithstanding their adoption, they would enjoy an advantage with respect to inheritance taxation because they could take as class A transferees from both natural and adoptive grandparents. A fair reading of Probate Code, section 257 as amended in 1955, discloses an intention on the part of the Legislature to raise the status of adopted children to a level of equality with that of natural children, but the statute cannot be read to confer upon adopted children a position of superiority over natural children. Since Edgar's children by their adoption lost the status upon which they formerly qualified as lineal issue of their natural grandparents and upon which their right to be classed as class A transferees under Revenue and Taxation Code, section 13307(a) depended, the controller properly designated them as class D transferees pursuant to section 13310.

There is authority for the view that the 1955 amendment to Probate Code, section 257 has effect beyond the field of intestate succession. Thus, Probate Code, section 90, relating to pretermitted heirs, appears in Division I of the Probate Code, relating to wills, and not in Division II relating to succession. If affects the right of the testator to make bequests in that such bequests are abated where the heir is pretermitted. (Probate Code, section 91.) Prior to the amendment of Probate Code, section 257, issue of a deceased child of decedent would be a pretermitted heir in the natural line even after adoption out. This is no longer true. Estate of Dillehunt, 175 Cal.App.2d 464, 346 P.2d 245; Estate of Garey, supra.

In Estate of Goulart, 222 A.C.A. 881, 892, 35 Cal.Rptr. 465, 473, we held that Probate Code, section 92 (the anti-lapse statute) could not prevent failure of devises to natural brothers and sisters of an adopted testatrix because, under Probate Code, section 257 the natural brothers and sisters of the testatrix were no longer her kindred. It was there said: ‘We believe that the amendment to section 257 was intended to accomplish a complete severance of the former relationship of the adoptee with his natural, or biological, relatives, and to make them no longer ‘kindred’ in the eyes of the law, and on the other hand, to create a new kinship. The word ‘kindred’ is not defined in the Probate Code. Although no amendment to section 92 has been made, it appears that the Legislature intended to create new kindred for the adoptee. We believe that this conclusion follows from (1) the new policy of the state in respect of adoptions, as shown by the history of the 1955 amendment to section 257 of the Probate Code, (2) the trend of judicial decisions, and (3) the logical consequence of construing the word ‘kindred’ as applying exclusively to the new, or adoptive, familial relationship.'

In our view, Revenue and Taxation Code, section 13307(a) must be read and construed in the light of the 1955 amendment to Probate Code, section 257 and interpreted in harmony with the present policy of the law relating to the status of adopted children. When this is done it appears that adopted children are no longer ‘lineal issue’ of their natural grandparents as that term is used in the Revenue and Taxation Code and are properly classified for tax purposes as strangers to their genetic line.

The purported appeal from the minute order of February 15, 1963 is dismissed; the order of March 11, 1963, entitleld ‘Order Overruling Objections to Report of Inheritance Tax Appraiser and Fixing Tax’ is affirmed.

SALSMAN, Justice.

DRAPER, P. J., and DEVINE, J., concur.

Copied to clipboard