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Which state’s intestacy laws apply at death?

The division and distribution of an intestate estate is often controlled by the intestate laws of just one state, because most people live and own property in the same state. Although this is the most frequent scenario, there are also many people who own property in multiple states and who have residences in multiple states.

Two main factors will determine which state’s intestacy laws control the disposition of a person’s intestate estate: 1) The property classification, or type, of each item that belongs to the estate, and 2) the state of the person’s domicile at the time of death.

Types of Property
There are generally three forms of property: Real estate, intangible personal property, and tangible personal property.

Real estate is comprised of the ground, as well as all property that is permanently attached to the ground, such as a house. Intangible personal property is basically cash and items that represent cash, such as stock certificates. Finally, all property that does not fall into either of the previous two categories is generally classified as tangible personal property.

In addition to common objects, such as clothing, household appliances, and furniture, tangible personal property will also include larger or more expensive items, such as all electronic equipment, jewelry, artwork, and vehicles.

Domicile
A person’s domicile is defined as the geographic location of his or her permanent legal home; the place which you intend to use as your dwelling for an indefinite or unlimited period of time, and to which, when absent, you intend to return. A determination of your domicile is mainly a matter of your intention as indicated by your actions.




Although any person may have more than one home or house, each person can have just one domicile. According to the IRS, some of the common factors that can be used to classify a place as a domicile, rather than a residence are:

Where you pay state income tax, Where you vote, Location of property you own, Length of residence, and Business and social ties to the community.

In addition to these factors, the IRS also provides the following statement as guidance in determining a person’s domicile:

The amount of time spent in one place does not always explain the difference between home and domicile. A temporary home or residence may continue for months or years while a domicile may be established the first moment you occupy the property.

Domicile and Property Type Example
Howard owns a house and lives in Texas, where he works as an airline pilot. Most of his jobs involve connecting flights in Chicago and he also spends one or two nights in Miami each month while he is between evening and morning flights. The airline maintains an apartment for him in Miami where he moves some of his personal belongings, such as clothing, a television, and a gaming system.

Finding that he spends so much time in Illinois, Howard opens a checking account with a local bank that has a branch in the airport, mainly using it to take money from the ATM. Early in is career Howard also purchased some vacant land in Florida as an investment, on the advice of a local friend.

Sometime later Howard retires, returns to his Texas home, and begins traveling around the country. Although he never returns to Illinois, Howard occasionally visits Florida and uses the apartment rented by his former employer when it is available.

During this time, Howard also buys a house in Hawaii where he begins spending about seven months out of the year. He continues to return and live in Texas at all other times. Finally, five years into his retirement, Howard is vacationing in California when he becomes ill and is admitted to the hospital for treatment. Although he is immediately treated, Howard does not become well enough to leave and ends up staying at the hospital for thirteen months before his death.

Determining Domicile
In determining how to distribute Howard’s intestate estate, the first factor is to establish the state he was domiciled in at the time of his death. Howard owned property, resided in, or had business ties with five states: California, Florida, Hawaii, Illinois, and Texas. Of these five, it is clear that Howard never intended to reside in Illinois or Florida, which allows them to be immediately be eliminated as candidates for his domicile.

 

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