What If I Have Homes in Escondido and Another State

It started with a frantic call from Dax. He’d meticulously crafted a codicil to his trust, intending to leave his beachfront condo in Florida to his daughter, and the Escondido home to his son. He was absolutely certain he’d signed it, witnessed it, and properly notarized it. Except, when his wife went to probate the original trust after his unexpected passing, the codicil was nowhere to be found. Not in the safe deposit box, not with the trust documents, nowhere. The loss meant the default distribution in the original trust governed – leaving his daughter with nothing. This simple oversight, a missing piece of paper, cost her a property worth over $600,000.

As an Estate Planning Attorney and CPA with over 35 years of experience here in Escondido, I see situations like Dax’s far too often. Multiple property ownership adds layers of complexity that many people simply don’t anticipate. It’s not just about where you own property, but how that ownership interacts with your overall estate plan, and crucially, your domicile.

How Does California Determine Domicile When You Own Property Elsewhere?

Many clients assume that simply spending less than 183 days in California automatically terminates residency. That’s a common misconception. The Franchise Tax Board (FTB) doesn’t operate on a simple day count. They use what’s called the “Closest Connection” test, evaluating up to 19 factors to determine where your primary home – and therefore your domicile – truly lies. These factors include where your primary doctor is located, where you’re registered to vote, the location of your children’s schools, and even where you maintain your memberships (country clubs, gyms, etc.). Essentially, it’s about establishing where your life is centered.

This is incredibly important because your domicile dictates which state’s laws govern the majority of your estate, and where your estate tax return will be filed.

What Happens to Real Estate in Multiple States?

Let’s say you own a home in Escondido, California, and a condo in Scottsdale, Arizona. Your primary residence is in Escondido, establishing California as your domicile. The California probate process will govern the overall estate administration. However, the Arizona condo doesn’t magically disappear. It’s subject to probate in Arizona, a separate but parallel process. This is where things get expensive and time-consuming. You’ll need attorneys in both states, potentially duplicating efforts and adding significant legal fees.

Can I Avoid Probate Altogether on Out-of-State Property?

Absolutely, and that’s where proper estate planning comes in. Utilizing strategies like a Revocable Living Trust can allow you to bypass probate in both California and any other state where you hold real estate. The key is to properly fund the trust with all of your properties. This means legally transferring ownership of those properties to the trust.

Furthermore, for deaths on or after April 1, 2025, a primary residence valued up to $750,000 qualifies for a ‘Petition for Succession’ under AB 2016 (Probate Code § 13151). However, it’s vital to understand that this is a Petition requiring a Judge’s Order, not an Affidavit. Also, to qualify, the decedent’s other non-real estate assets must typically remain below the separate $208,850 Small Estate limit. Don’t confuse this with the Small Estate Affidavit, which is strictly for real property valued under $69,625 (often used for timeshares or vacant land).

How Does My CPA Background Help with Multi-State Estates?

As a CPA as well as an attorney, I bring a unique perspective to estate planning. The “step-up in basis” is a critical tax benefit often overlooked. When you inherit an asset, its tax basis is reset to its fair market value on the date of death. This can significantly reduce capital gains taxes when the asset is eventually sold. However, accurately valuing real estate in multiple states requires specialized knowledge and potentially appraisals. Furthermore, the One Big Beautiful Bill Act (OBBBA) permanently increased the Federal Estate Tax Exemption to $15 million per person effective Jan 1, 2026, which will affect larger estates. Proper planning now can maximize these tax advantages.

What If I’m Considering Moving?

Even if you’re planning to become a full-time resident of another state, it’s crucial to update your estate plan accordingly. Remember, moving yourself doesn’t move your business income. Under updated Regulation Section 25136-2 (effective Jan 1, 2026), California sources asset management fees based on the domicile of the underlying investors, not the fund itself. Also, the FTB takes a very close look at residency changes and will utilize Form 4600 (Residency Questionnaire) to scrutinize your life, including the location of your dentist, the registration of your pets, and where you keep your safe deposit boxes.

Don’t let a lost codicil or a misunderstood probate process derail your family’s future.

How do probate courts in California evaluate intent when a will is challenged?

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.

When a will is drafted with California probate review in mind, it becomes a stabilizing roadmap rather than a source of conflict. Clear intent, proper authority, and compliant execution protect both families and estates.

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 2026 OBBBA update, which permanently set the federal estate tax exemption at $15 million per person ($30 million for couples), indexed for inflation.
• 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.