## Facts

- Louis Kessler and his wife lived in California from 1947 to 1957.
- During that period, Louis purchased stock that became community property under California law.
- In 1957, the couple moved to Ohio, a non-community-property state, where Louis later died.
- The executor treated the stock as retaining its community-property character and concluded the wife already owned an undivided one-half interest not subject to Ohio succession tax.
- An Ohio probate court accepted the executor’s position and excluded the wife’s one-half interest from Ohio succession tax.
- The Ohio Tax Commissioner appealed, asserting that a taxable interest passed to the widow at death.

## Issues

1. Whether the surviving spouse’s acquisition at death of the decedent’s management and control rights over her one-half community-property interest constitutes a taxable “succession” under Ohio’s succession tax provision addressing joint and survivorship property.
2. Whether Ohio may tax the death-related change in rights associated with community property acquired under another state’s law, when Ohio is the domicile at death.

## Decision

- The Supreme Court of Ohio reversed the probate court, with three justices dissenting.
- The court held that the stock remained community property, and the wife had a vested one-half ownership interest.
- The court nonetheless concluded that the widow succeeded at death to the husband’s management and control rights over her one-half interest.
- That succession of management and control rights was taxable under Ohio’s succession tax statute applicable to joint and survivorship property.

## Legal Principles

- A state succession tax may reach not only transfers of title but also the acquisition at death of economically valuable incidents of ownership (such as exclusive management and control).
- Property acquired as community property may retain that character after a change of domicile, but the domiciliary state at death may tax death-triggered changes in the bundle of rights.
- A broad construction of “succession” under a joint-and-survivorship taxing provision can include a survivor’s enlargement of rights at death, even when the survivor already owned an undivided one-half interest.

## Conclusion

Ohio treated the widow’s post-death acquisition of her husband’s community-property management and control rights as a taxable succession, even though her one-half ownership interest in the stock was vested under California law and the asset retained its community-property status after the move to Ohio.


In re Kessler’s Estate, 177 Ohio St. 136, 203 N.E.2d 221 (Ohio 1964)