Opinion letter to the Honorable Edgar J. Keating

OPINION RBQUKS!' NO. 303 - I q G, 2... - ANSWERED BY Li'H'JtR .. (Eingeland) :;k f( ,;/ (/ 9 ~$) February 5, 1963 Hono:rable ldgar J. Keating Home Savings Building 1006 Grand Avenue lanaaa City, IU.saour1 Dear Bena tor Jtea t1ng a FIL E {)_, This ia in answer to your letter dated August 2, 1962 involving the construction of a preVious Attorney aen.ral•a opinion dated A~ril 25, 1946 wh1ch concluded that Series E bonds iaaued to two persona in co-ownerahip torm are not taxable "unleas purchased in contemplation ot death or in- tended to take errect in PQaaeaaion or enjoyment at or after the death or the purchaser" • As the tacts in that opinion request were limited to "co- ownerah1pn the oo1n1on dealt only with that type or ownership and not tti th the beneficiary form of ownership. l'he 1946 O'Pin1on referred to in your letter was written pr1or to the dee111ona of the Miaeouri Supreme Court in the caaea or In re Gerling's Estate (1957), 303 SW 2d 9151 and Osterloh v. Carpenter (1960), 337 SW 2d 942. !he Gerling caae, supra, held that there waa no tranater of property subject to inheritance tax on the death or a Joint tenant. 'l'b.e aubeequent- ly decided Osterloh case, supra, held that there was no tranafer ot pro~erty subject to inheritance tax upon the creation of a joint tenancy even though wJ.thin the statutory two year period before decedent • s death ao as to create a statutory presumption that it waa 1n contemplation o~ death. !he effect o~ these two dee1a1ona was to ett'ective~y remove jointly bald property from 111aaour1 inh•ri tance tu. Under the author1.ty o£ these two cases the only ~uestion presented with Series K savings bonds ia whether the co-owner- ship" of these bonds is the legal equivalent or "joint ownership". Honorable Edgar J. Jteating It so, the Osterloh and Gerling oases, supra, would be controlling and the bonds would not fonn part or the taxable estate. In the case ot Valentine v. St. Louis Union Trust Company (1952), 250 SW 2d 167, the Supreme Court ot Missouri construed the effect or co-ownel'ship ot United States savings bonds, and noted, 1. c . 169• "The Treasury regulation pertaining to co-ownership ot United States savings bonds, with respect to such co-ownera, creates a joint tenancy with right or survivorship • '' ~s being so, these bonds are not taxable as part of decedent's estate as they are in effect jointly held property and therefore come within the rule as announced 1n the Osterloh and Gerling casea, supra. In any event, ae stated 1n your letter this co-ownership estate was established more than two years prior t o decedent's death and therefore was not made in contemplation of death as defined in our 1nher1 tance tax statutes. It 1a, therefore, the conclusion ot this office that United States savings bonds, beld in co-ownership, are not taxable on the death of a co-owner. It 1& further the opinion of this otfice that the Attorney General•s opinion dated April 25~ 1946, ie no longer controlling and is therefore withdrawn. Yours very truly~ TldiU I. IIDLE'l'OH Attorney Oeneral