We have many clients who divide their time between New York and another state, often Florida. If you spend significant time in two different states, there may be a question as to where you actually reside. The question is more complicated than where you spend the most time — and the answer can really matter. Regardless of how you feel about each location or the personal connection you may have to one or the other, for many legal purposes you can only have one legal residence, otherwise known as a domicile.
Which state is your legal domicile will have a significant impact on the governmental benefits or protections afforded to you, on whether your estate will be subject to estate taxes and even on your income tax liability. Your domicile might also affect your estate and retirement planning and whether your advisors would recommend gifting as a planning strategy. Property ownership is defined differently in different states and marital rights also vary. The amount of compensation that your fiduciaries such as guardians, executors and trustees are entitled to and how it will be calculated changes from state to state, as do the rules governing the powers and obligations of such individuals.
Your domicile is generally determined by several factors but among them is your intent to make one place your legal domicile. Sometimes domicile can be established by completing and filing certain documents or declarations which evidence your intent to make a certain state your domicile. These are governed by specific requirements as to their contents and supporting documentation, if any, and where they must be filed. Other factors include the amount of time you spend in each location, where you are registered to vote, your mailing address, where you file your taxes, where your driver’s license was issued, where your car is registered, your business and other contacts, where you own property, the address listed on your passport and the address listed on your Last Will and Testament or other estate planning documents. Therefore, if you question the state in which it might be said that you are domiciled, or if you live in more than one place regularly, it is recommended that you consult with an experienced estate planning attorney in the state in which you intend to establish your domicile. To the extent that you wish to change your domicile, it is important to consult with an attorney to formalize a change and to inquire about mandatory waiting periods for any benefits for which you may wish to qualify. Failure to properly establish a domicile in a new state and to abandon your domicile in a former state can have tax and other consequences. Ask your attorney about the consequences of changing your domicile and the impact of such a change.