In one of our recent blog posts, we discussed the legal term “domicile” and outlined exactly why it is so important to establish the correct domicile during the estate planning process. If you are part of an international family, or if you or your spouse is a non-resident of the United States, correctly establishing your domicile may save you significantly when it comes to estate taxes and gift taxes.
It is critical to understand that there is no black-and-white test to determine where your domicile is located. Instead, officials may take an overall look at your life before deciding where your permanent residence is and how you should pay your taxes. Because of this system, there are certain steps that you can take to make your primary place of residence very clear. Here are some ways to get started:
- Spend time in your domicile. Officials will wish to know how many days of the year you were in each location. The more time you spend in one place, the more clear your residence.
- Take steps to become a permanent resident in the United States. Your visa will often reflect your long-term intentions. If you are striving to secure a green card or to become a citizen, you make it clear you want to remain in the United States.
- Get active in your community. Join organizations, attend events, and donate to local charities. Anything that you contribute to your community is evidence that you care about the area and want to put down roots there.
- Establish your everyday life there. Where is your drivers’ license from and where is your car registered? What address is associated with your credit cards? Where are you registered to vote? These are easy, inexpensive changes you can make that go a long way toward establishing your domicile.
- Leave your other life behind. If you are establishing a your domicile somewhere new, take steps to distance yourself from your old residence, even if you still live there part time. Change you address on all of your accounts, try not to spend too much of the year there, and move your pets and big pieces of personal property to your new place.
- Move your business interests. Where you do business reflects where you consider home. If you are not retired, your business interests should stick closer to where you want to establish your domicile. Limit or end your business near your old residency if possible.
- Declare your domicile in your documents. All of your estate planning documents, such as your will, should state your domicile outright. An experienced estate planning lawyer can make certain that this is the case.
Are you part of an international family that worries how your domicile might affect your taxes and your estate planning efforts? At The Law Office of Janet Brewer, we can help you make certain that your estate plan is sensible and optimal. Call today to speak with an experienced, skilled California estate planner: (650) 325-8276.