Flournoy

This is an appeal by the State Controller from an order fixing the amount of an inheritance tax. The single question to be decided is whether the value of certain shares of common stock, transferred in trust by the decedent in 1958, should be included in the measure of the tax under section 13643 of the Revenue and Taxation Code. 1 The inheritance tax appraiser included the value of the stock in his computation of the tax. The executor filed objections, and a hearing was held in the superior court, where evidence was received, after which that court made its findings of fact and an order sustaining the objections in this respect and fixing the tax without reference to that transfer. We have concluded that the evidence establishes as a matter of law that the transfer of the common stock is taxable. Accordingly, we reverse the order of the superior court.

Prior to 1958 the decedent, Ada Thatcher Huntzinger, was the owner of a parcel of real property on which she operated an office building known as the Thatcher Medical Center. In 1958, on the advice of her attorney, she adopted an estate plan which contained the following elements:

As the plan was explained to Mrs.…