Florida Estate Planning and Probate Law Blog focused on recent case law and planning ideas.

I AM A RESIDENT OF WHAT STATE?

The criteria for determining whether a deceased individual's estate is subject to probate or estate taxes in a state is based upon their state of domicile at death. Reaching that determination can be complex.

For income tax purposes, the residency requirement is based on the number of days you reside in a particular state in a given year. If an individual does not spend more than 183 days in any one state during the year, more than one state may claim that individual as a resident, causing them to potentially owe tax in two or more states. However, for purposes of determining whether an individual is subject to probate or to estate or inheritance tax in a state the individual’s domicile will be scrutinized at the time of their  death. A domicile is where one intends to make his or her home for a permanent or indefinite period. A taxpayer can have only one domicile. Once domicile is established, it continues until it is established elsewhere.


Many factors can be utilized to determine an individual's domicile: the location of your principal residence; mailing address; where you applied for a homestead or veterans property tax exemption or other comparable benefit; whether you can be claimed as a dependent on another person’s federal income tax return and where that person is domiciled; where your spouse or close family members reside; where you are registered to vote; the state which issued your driver’s license; vehicle registration; professional licenses; location of active bank accounts; unemployment insurance; resident tax returns; the state where you earn your wages; address recorded for insurance policies, deeds, mortgages or other legal documents; state in which you hold fraternal, social or athletic memberships; location of house of worship; etc...

Add to this equation the fact that states are looking for tax revenues and may attempt to claim you as a resident based upon past behavior. This can result in multiple states claiming a decedent as a resident. In addition, even if an individual is domiciled in one state, his or her heirs may still need to pay estate or inheritance taxes or probate a will in another state if they owned real property in a state that is not his or her state of domicile. Proper planning may avoid the need for a separate probate in those other jurisdictions.