Residence vs. Domicile: An Important Distinction in Estate Planning
It is important for all of us, not just the uber rich, to have a plan in place that specifies how we would like our assets to be transferred when we die. In the legal world, the process of creating this plan is called estate planning, and generally involves the preparation of several sophisticated legal documents. It is important to consult with an experienced estate planning attorney during this process in order to make sure that all of the documents you execute comply with your state’s estate planning laws. But how do you know which state is “your state”? What if you spend your summers in rural Wisconsin and your winters in sunny Florida? Legally speaking, you can be a resident of several states, but you can only be domiciled in one state (which is considered to be your primary place of residence). Determining your state(s) of residence and your state of domicile can be quite tricky in some instances, but these determinations are very important. This article briefly explains how your state(s) of residence and domicile are legally determined and why these determinations are so important to the estate planning process.
The Difference Between Residence and Domicile
As mentioned above, an individual can legally reside in several states, but a person can only be domiciled in one state at a time. The domiciled state is considered to be the individual’s main place of residence, and is the state which the individual intends to remain in or return to. In other words, it is the state in which the individual has his or her true, fixed, and permanent home and principal establishment that the individual intends to remain at or return to. For example, if a college student grew up in Florida and moved to Georgia for college with the intent to return home to Florida after graduation, the student likely has their legal residence in Georgia but is still domiciled in Florida.
Estate Planning Issues That Are Determined By State Law
While there are many estate planning issues that are governed by state law, and consequently determined by your state of domicile, an article from the Herald Times Reporter outlines a few issues that illustrate why your state of domicile is so important for estate planning purposes. For example, when a person dies their estate typically goes through probate in the state where the individual was domiciled at the time of their death. Therefore, estate planning documents that detail how your assets are to be distributed after you die, such as a will or a trust, must comply with the probate laws in your state of domicile in order to be valid. Additionally, an individual’s state(s) of residence are also important to consider during estate planning for a variety of reasons including taxation and the enforceability of your power of attorney.
Need Legal Assistance?
If you live in Florida and are interested in engaging in comprehensive estate planning, contact Kira Doyle Law today. You never know what the future holds, and getting your affairs in order should not be put off. Our experienced estate planning lawyers would be happy to sit down with you to discuss your estate planning needs and legal options. To get started, simply call our office in St. Petersburg at (727) 537-6818.