Written by attorney Matthew Adam Pek

Changing One's Domicile for Estate Tax Purposes

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The provisions of New York Tax Law providing that one who remains outside the state for a certain number of months each year is not liable for the state income tax have no application to a determination of domicile in an estate tax proceeding. In re Robinson’s Estate, 184 Misc. 330 (N.Y. Sur. Ct. 1944); In re Daly’s Estate, 178 Misc. 943 (N.Y. Sur. Ct. 1942). “Domicile” has been defined as “[a] fixed, permanent and principal home to which a person whenever temporarily located always intends to return.” SCPA § 103(15). The mere fact that one declares in his or her will and other formal documents that he is a resident of a certain place, which declarations are inconsistent with his conduct, is not controlling for estate tax purposes (see, e.g.,Bourne, 181 Misc. 238 (N.Y. Sur. Ct. 1943)), nor are formal declarations to tax authorities, unaccompanied by facts consistent therewith, sufficient to sustain a finding of domicile for estate tax purposes. Id. However, declarations or affidavits claiming residence in a particular place, which are consistent with the conduct of the declarant, are of impressive weight in determining that person’s domicile for estate tax purposes. In re Kronig’s Estate, 36 N.Y.S.2d 909 (N.Y. Sur. Ct. 1942). Although several of the following cited cases discuss the domicile issue in an income rather than estate tax context, New York courts have addressed the change of domicile issue in a uniform fashion, applying the same principles and analysis in both the income and estate tax contexts. Clute v. Chu, 106 A.D.2d 841 (3d Dep’t 1984); Kennedy v. New York State Income Tax Bureau, 85 A.D.2d 837 (3d Dep’t 1981). Re Erdman, N.Y. Tax Appeals Tribunal TSB-D-95-(12)I, 1995 WL 228244 (N.Y. Tax. App. Trib.); Re Burke, N.Y. Tax Appeals Tribunal TSB-D-94-(18)I, 1994 WL 266764 (N.Y. Tax. App. Trib.). Warnecke, 252 A.D.2d 748 (3d Dep’t 1998); Clute, 106 A.D.2d 841 (3d Dep’t 1984). Re Kafka, Dec. State Tax Comm., TSB-H-84-(128)I, 1984 WL 21360 (N.Y. Dep’t Tax. Fin.); Re Starke, Dec. State Tax Comm., TSB-H-80-(309)I, 1980 WL 7265 (N.Y. Dep’t Tax. Fin.). Reichstetter, DTA No. 818356, 2002 WL 31496935 (N.Y. Div. Tax. App.). Re Clute, Dec. State Tax COmm., TSB-H-83(284)I, 1983 WL 21005 (N.Y. Dep’t Tax Fin.); Re Zigrossi, Dec. State Tax Comm. TSB-H-83(181)I, 1983 WL 20557 (N.Y. Dep’t Tax Fin.). Warnecke, 252 A.D.2d 748 (3d Dep’t 1998). Schulman v. Tully, 86 A.D.2d 705 (3d Dep’t 1982); Minsky v. Tully, 78 A.D.2d 955 (3d Dep’t 1980). In re Estate of Donahue, 262 A.D.2d 840 (3d Dep’t 1999); Schulman, 86 A.D.2d 705 (3d Dep’t 1982). Authority for each of the following factors can be found in the cases cited herein. Because these factors receive more in-depth discussion in the case studies that follow, specific citations for each factor have been omitted here. One such declaration stated: “I have now concluded to make my permanent home here, because on each succeeding day of my life now drawing to a close, I am the grateful witness of the successful development and steady growth of this noble institution [referring to the Memorial College she had founded at Tulane University, named in honor of her deceased daughter], which now engrosses my thoughts and purposes and is endeared to me by such hallowed associations. In order that there may be no occasion for misapprehension hereafter, especially in any matter touching the settlement of my estate, I desire to have it known by my particular friends that I have elected to make the city of New Orleans my place of domicile and permanent home, although of course I may occasionally visit or reside in other places.” Newcomb, 192 N.Y. at 247 (emphasis added). A seminal case in its own right, Newcomb has oft been cited for the proposition that, “[w]hile acts speak louder than words, the words are to be heard for what they are worth.” Newcomb, 192 N.Y. at 252. When a decedent has two residences, the earlier in time remains the individual’s domicile until a clear intention to change is established. Matter of Miller v. Police Commr. Of City of N.Y., 26 A.D.2d 803 (1st Dep’t 1966); Matter of Shapiro, 36 Misc.2d 271 (N.Y. Sur. Ct. 1962). Although the above referenced factors were considered by the court for the purpose of determining where the will was to be probated, these factors are nevertheless probative of Ms. Gadway’s intentions regarding her domicile and likely played a role in the court’s finding that she was domiciled in New York.

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