Where You Live May Not Be Where You’re Domiciled

Published in the New Hampshire Business Review
By: Scott H. Harris

Where you are domiciled, as distinct from where you reside, can control questions such as what law governs your estate, where you can file for divorce, the law that will apply to your marital dissolution, where you are eligible to vote and run for office, the imposition of income, personal property and inheritance taxes, the jurisdiction in which you can sue and be sued, and whether you or your children qualify for in-state tuition at universities and colleges.

Generally stated, domicile is established by physical presence with in a jurisdiction with an intent to make that place your home. Although individuals can have many residences or none at all, everyone must have a domicile somewhere.

Failing to appreciate the distinction between domicile and residence, can have dramatic consequences. Take, for instance, a peripatetic executive who decides to settle down and run for office. He may have accumulated a ski house in Colorado, a condominium on the beach in Florida for when cabin fever sets in, a house in Massachusetts because that is where his business was headquartered and a farm in New Hampshire where he was raised and wants to celebrate the holidays. In the midst of a bruising primary fight for political office in New Hampshire, our executive’s opponent moves to disqualify him on the grounds he is a domiciliary of Massachusetts and ought to run there (if at all). Is our political aspirant finished before he starts?

What about the domicile of a super wealthy former athlete who spends more than three quarters of her time on the road as an ambassador of the sport and in promotion of her line of sportswear. She has three now grown children from prior relationships and recently acquired a trophy husband, whom she tolerates. Despite her good health, our star’s star passes too soon. Her Will provides that her worldly wealth goes to a sports foundation. Will the Will be honored? She has residences in Hawaii, New York, London and in the Cayman Islands. She spent holidays at her mother’s home on Cape Cod, which is where she grew up and at one point called home. Her husband spent most of his time in the New York apartment. If our athlete is found to be a domiciliary of Massachusetts, her husband can claim a life estate in one third of her total property. Other jurisdictions allow him and the children nothing, some might allow him a percentage of the estate outright. Who wins this trophy of an estate, the husband or the sports charity?

Domicile is at least partially a function of intent so the answer to the question of one’s place of domicile is not always simple. Courts look at things like where the individual votes, visits with family and friends, holds a driver/s license, does their banking, and receives important mail. Paperwork is important too, so the return address tax returns, applications for insurance, and professional license registrations all count. Mere time spent in one place or another can be significant, but not dispositive, especially if you are compelled by business or some other similar factor to be present in a place. One’s declaration of where he or she intends to make their home is important, but not dispositive, especially if that declaration is at odds with the objective evidence.

Once domicile is established in a place, that legal home continues until it is supplanted by a new domicile. This principle is a function of the law’s requirement that every individual have a place where they can assert legal status. In the case of the athlete, for example, the courts might determine that she is domiciled on the Cape because that is the only place she ever considered home—every place else she treated as way stations convenient to her needs, but not the home hearth. The budding leader will argue that he might have spent time in other states, but home is where his animals are, and that would be in New Hampshire. His opponent will dig for any scrap of paper that listed an address someplace else.

The stakes can be high, the consequences sometimes unanticipated, and the outcome uncertain. It therefore makes sense to consider this important issue and plan carefully, lest the law of unintended consequences rule the day.