Have you heard of the term domicile? While most people may only think of this term as referring to the place they live, it can be much more complex and have more intricate implications when considered in the legal sense. More than where a person lives, a domicile is really a residence where a person has a permanent intention of residing. It can have significant implications on a number of levels, the estate planning context. Have you considered the importance of where you live when you die? It is often overlooked but remains important all the same. Here, we will review some of the reasons why domicile matters in estate planning.
Why Does “Domicile” Matter in Estate Planning?
While domicile may be simple enough for most people, as they have one home that they live at year-round, others may actually have a difficult time saying where they “live with an intention of staying permanently.” This can be especially true in a state like Florida where we have so many snowbirds that may split their time evenly between a Florida home and a more northern residence. There are several factors that will go into the determination of a person’s domicile. In Florida, those seeking to add force to the argument that Florida is the state in which they are “domiciled,” can file an official “Declaration of Domicile” in Florida. While not dispositive of the domicile determination, it can be a significant factor to consider in such a determination.
So, why does it matter where you are domiciled in estate planning? The state laws of where you die domiciled will rule in the administration of your estate. This can have several significant implications. Most states will recognize estate planning documentation, such as a will, that has been properly executed according to the laws of another state. This means that your estate plans will likely be recognized as valid even if executed in a state other than the one where you die domiciled. Some of the provisions in your will, however, may be rendered invalid or ineffective due to the differing laws of the states.
For instance, laws regarding homestead and the rights of surviving spouses can have serious implications when not considered during estate planning. Should you intend to leave your spouse a certain portion of an inheritance, this could be rendered ineffective should you fail to consider something such as the elective share laws of a state. An elective share, in effect, grants a surviving spouse the right to a minimum portion of an estate’s value. This means that any attempts at disinheriting a spouse or leaving them less than the elective share could very well be rendered useless should it not be properly planned for.
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At Verras Law we provide trusted estate planning legal counsel as we work with you to develop a strong, comprehensive estate plan uniquely crafted to your own specific needs and goals. Contact Verras Law today.