Domicile
Domicile is the place a person lives with no definite present intent to leave. This glossary entry explains how domicile is identified for federal estate and gift tax purposes and how it differs from residency. For owners of businesses, real estate and private investments, domicile can also determine whether a state treats an estate as belonging to a resident or nonresident.
How it works
For federal estate and gift tax purposes, domicile turns on living in a place without a definite present intent to leave. Federal guidance describes the determination as fact specific. A U.S. resident decedent for federal estate tax purposes is a person domiciled in the United States at death.
A person can establish domicile after a brief stay when there is no definite present intent to leave. For gift tax purposes, a person acquires U.S. domicile by living there, even briefly, with no definite present intention of moving.
Residency and domicile are distinct terms. Practitioners describe a person as having one domicile but potentially multiple residencies, with residency definitions varying across immigration, income tax and estate tax contexts.
Where it shows up for owners of businesses, real estate and private investments
Domicile can affect how a state classifies an estate. Connecticut defines a resident estate as the estate of a person domiciled in Connecticut at death, and a nonresident estate as the estate of a person not domiciled there at death.
Family location, business activity and living accommodations are among the objective facts practitioners describe as relevant to a domicile of choice. Immigration status is another factor that can affect an estate plan.
Points that are easy to confuse
A change of domicile is different from spending time in a new state. Practitioners describe a change as involving abandonment of the former domicile and adoption of a new one, and says counting days alone is insufficient.
A noncitizen who establishes U.S. domicile remains a domiciliary under federal guidance until a new domicile is established.
Common questions
Can a brief stay establish domicile for federal transfer tax purposes?
Yes. Federal guidance states that a brief stay may establish domicile when there is no definite present intent to leave.
Does time spent in a state alone determine domicile?
No. Practitioners describe counting days in a new state alone as insufficient to establish a domicile change.