Estate & Trust Administration For Dummies, 2nd Edition
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Knowing where the decedent’s domicile (where the decedent had his or her primary residence) was at date of death is key when figuring out where you must probate the assets and what state you must pay taxes to (although real estate is subject to state estate or inheritance tax, if any, in the state in which it’s located).

All real estate in the decedent’s state of domicile and all other tangible and intangible assets located anywhere in the United States are subject to probate in the decedent’s state of domicile if all other requirements for probate are met. Only after you’ve made that determination can you begin primary probate in the correct court and ancillary administration in any other state where the decedent owned property.

It may seem odd to even question where the decedent lived at the time of death, but often the decedent’s official home may not have been where you thought it was and so much of estate administration rests on the decedent’s legal home.

In many instances, determining domicile is as easy as can be. Uncle Jim was born on the farm, worked on the farm, and you buried him from the farm after he died. The farm was, without question, his domicile. Often, people own real property in more than one place, and even more than one state (or country), and they pay taxes in more than one state at any given time.

If you’re responsible for administering an estate that owns real estate located in multiple places, how do you know where to initiate probate?

The list of items used to determine domicile is long, and far from absolute. Certain items on the list may indicate one legal home, but others may show a different one. You have to make the final determination based on the weight of the evidence. Be prepared to back up your results; for the states in question, large potential tax revenues may lie in the balance.

Evidence used to determine domicile includes the following:

  • Address of residence where the decedent lived more than 50 percent of the time.

  • Place of religious affiliations. Evidence of memberships in churches, synagogues, or mosques can be crucial.

  • Car registration. People rarely register their cars in a state where they only live part time.

  • Voter registration. You often have to show proof of residence in order to register to vote.

  • Address shown on passport. Of course, passport addresses aren’t updated when you move, but if the address matches the domicile you want to establish, so much the better.

  • Bank accounts established in local banks. Although with the rise of interstate and Internet banking, this isn’t as stellar a form of evidence as it once was.

Declarations of homestead are required in some states to protect your primary residence from creditors or to give you a lower tax rate, and if you find one attached to a tax return or stashed away in a file somewhere, it can go a long way toward supporting your argument that the decedent was domiciled in a particular state.

About This Article

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About the book authors:

Margaret Atkins Munro, EA, has more than 30 years of experience in trusts, estates, family tax, and small businesses. She lectures for the IRS annually at its volunteer tax preparer programs. Kathryn A. Murphy is an attorney with more than 20 years of experience administering estates and trusts and preparing estate and gift tax returns.

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