Can I Have Dual Domicile in Temecula and Abroad

Lillian discovered a handwritten codicil, dated just weeks before her father’s death, changing his estate plan. She’d assumed his assets would pass to her and her sister equally. Instead, the codicil, barely legible and missing a witness signature, left everything to a new acquaintance. The ensuing legal battle cost her over $80,000 in attorney’s fees and fractured her relationship with her sister—all because a simple amendment wasn’t properly executed.

Establishing domicile—your true, fixed home—is deceptively complex, particularly for those with significant ties both in California and overseas. It’s more than just a mailing address or spending time in a place. The California Franchise Tax Board (FTB) looks at the totality of your circumstances to determine where you’re legally considered to reside for tax purposes, and that determination directly impacts estate tax liability and the administration of your estate. Many of my clients, after building successful careers and lives here in Temecula, find themselves questioning their domicile as they spend increasing amounts of time abroad, whether for business, retirement, or family reasons. They understandably assume that simply spending less than 183 days in California will resolve the issue, but that’s a common misconception. Spending less than 183 days in California does not automatically terminate residency; the FTB uses the ‘Closest Connection’ test (evaluating 19 factors like your primary doctor and social ties) to determine domicile.

What Happens If I Claim Dual Domicile?

While the idea of maintaining dual domicile – being legally considered a resident of both California and another country – sounds appealing, it’s rarely sustainable. The FTB and the courts generally adhere to the concept of having one primary domicile. Attempting to claim dual domicile often results in scrutiny and potential challenges from the FTB, especially when it comes to estate tax and income tax. California is aggressive in protecting its tax base, and they will closely examine your connections to the state. If you maintain significant physical presence, financial ties, and personal connections to California, the FTB is likely to assert that California remains your domicile, even if you spend a considerable amount of time elsewhere.

How Does This Impact Estate Planning?

Your domicile is crucial for estate planning because it dictates which state’s laws govern the distribution of your assets. California’s probate process, while recently streamlined by AB 2016 (Probate Code § 13151) which established a “Petition for Succession” for primary residences valued up to $750,000 for deaths on or after April 1, 2025, can still be complex and time-consuming if your estate is subject to full probate. It’s important to remember that this Petition requires a Judge’s Order, it is not an Affidavit. The rules surrounding smaller estates are different; the Small Estate Affidavit applies to real property valued less than $69,625. If your domicile is deemed to be outside of California, the laws of that jurisdiction will apply, potentially altering the entire estate distribution scheme. Furthermore, if your estate exceeds the federal estate tax exemption—currently $13.61 million in 2024, but increasing to $15 million per person effective January 1, 2026 due to the One Big Beautiful Bill Act (OBBBA)—your estate could be subject to federal estate tax. Determining your domicile accurately is therefore essential for minimizing tax liabilities and ensuring your wishes are carried out as intended.

What Factors Does the FTB Consider?

The FTB’s ‘Closest Connection’ test is comprehensive. They don’t rely on a single factor but rather a holistic assessment of your life. Here are some key areas they scrutinize:

• Physical Presence: Where do you spend the majority of your days?
• Financial Ties: Where are your bank accounts, investments, and primary sources of income located?
• Personal Connections: Where is your primary residence, your children’s schools, your doctor, and where do you maintain your social and religious affiliations?
• Driver’s License & Vehicle Registration: Where are these registered?
• Voter Registration: In which state are you registered to vote?

They will also use Form 4600 (Residency Questionnaire) to dig deeper—auditors will examine everything from the location of your dentist to the registration of your pets and where you keep your safe deposit boxes.

The CPA Advantage: Step-Up in Basis & Valuation

As both an Estate Planning Attorney and a Certified Public Accountant (CPA) with over 35 years of experience, I bring a unique perspective to these matters. Properly establishing and documenting your domicile isn’t just about avoiding taxes; it’s about maximizing the value of your estate. The “step-up in basis” rule, a significant tax benefit, allows beneficiaries to inherit assets at their fair market value at the time of the decedent’s death, potentially eliminating a substantial amount of capital gains tax. Understanding how your domicile impacts the valuation of assets—particularly real estate and business interests—is crucial. The complexities of California property tax (Proposition 13) and income sourcing require a nuanced understanding that goes beyond basic legal advice.

What Steps Should I Take?

If you’re contemplating establishing domicile outside of California, it’s essential to take proactive steps to sever your ties to the state. This includes:

• Transferring Financial Accounts: Move your bank accounts and investments to the new domicile.
• Changing Your Driver’s License & Vehicle Registration: Obtain a driver’s license and register your vehicles in the new location.
• Updating Legal Documents: Revise your estate plan, including your will and trusts, to reflect your new domicile.
• Establishing a New Primary Residence: Purchase or rent a home in the new location and spend the majority of your time there.

However, simply taking these steps isn’t enough. You must be able to prove that you have genuinely abandoned California as your primary domicile. Detailed record-keeping is paramount.

How do California courts decide whether a will reflects true intent or creates ambiguity?

In California, a last will and testament operates within a probate system that emphasizes intent, clarity, and procedural compliance. When properly drafted, a will does more than distribute property—it creates legally enforceable instructions that guide courts, fiduciaries, and beneficiaries through administration with fewer disputes and less uncertainty.

• Preparation: Review future needs regularly.
• Law: Check legal requirements.
• Parties: Update testator details.

For California residents, understanding how intent, authority, and compliance interact is one of the most effective ways to protect family harmony and estate integrity. A will that anticipates probate scrutiny is far more likely to be honored as written and far less likely to become the source of unnecessary conflict.

Controlling Legal Standards for Establishing Domicile and Residency

• Residency Guidelines: FTB Pub 1031 (Guidelines for Determining Resident Status)
  This is the primary resource for the “Closest Connection” test. In 2026, it details how the FTB evaluates 19 factors—including the location of your healthcare providers and social ties—to determine if your presence in the state is “permanent” or merely “transitory.”
• Voter Registration: California Secretary of State – Voter Registration
  Updating your voting address is a critical indicator of intent. For the June 2, 2026, Primary Election, the deadline to register online is May 18, 2026. This serves as a public declaration of your primary home.
• Federal Estate Tax: IRS Estate Tax Overview
  While domicile determines state tax, this resource outlines federal guidelines. It reflects the permanent federal estate tax exemption of $15 million per person ($30 million for couples), effective Jan 1, 2026.
• Proof of Residency: California DMV – REAL ID Checklist
  Since the federal enforcement deadline passed in 2025, a REAL ID is mandatory for domestic flights. This page lists the specific residency documents (e.g., utility bills, tax returns) that the state accepts as proof of a permanent California address.