Can Spouses Have Different Domiciles

Barry just received devastating news. His wife, Eleanor, passed away unexpectedly last month. He believed her “simple” will, signed five years ago, clearly left everything to him. But Eleanor had also drafted a codicil – a change to her will – just six weeks before she died, leaving a substantial portion of her estate to a charity. Barry never saw this codicil, and Eleanor’s attorney claims it was properly witnessed and filed. Now, Barry is facing the prospect of a costly legal battle, and potentially losing a significant portion of what he thought was rightfully his – all because of a missing document and a disagreement over Eleanor’s domicile at the time of signing. This situation underscores the critical importance of understanding domicile, even – and especially – within a marriage.

As an Estate Planning Attorney and CPA with over 35 years of experience, I frequently encounter confusion surrounding domicile, particularly when spouses have different living arrangements or travel extensively. It’s a deceptively complex issue with significant tax and probate consequences. While it’s certainly possible for spouses to have different domiciles, it’s rarely straightforward and requires careful consideration.

What Determines Domicile, and Why Does it Matter?

Domicile isn’t simply where you currently live; it’s your true, fixed, and permanent home – the place you intend to return to, even when absent. Establishing domicile correctly is crucial for several reasons. It dictates which state’s laws govern the distribution of your estate, and it has profound implications for income tax liability. California is a high-tax state, and properly establishing or changing domicile can save your family substantial sums. For example, a properly structured move out of California can shield assets from California’s income tax reach, but failing to do it correctly can lead to years of audit exposure.

How Can Spouses Establish Different Domiciles?

While unusual, spouses can legally maintain separate domiciles if they can demonstrate independent intent. This often arises in situations where one spouse maintains strong ties to a different state – perhaps continuing to work there, owning a business, or maintaining significant property. However, it’s not enough to simply spend time in another state. The key lies in proving a severing of ties with California and the establishment of new ties elsewhere.

• Physical Presence: Spending the majority of the year in a different state is a factor, but not determinative. 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.
• Intent: This is the most important element. Evidence of intent includes things like changing your driver’s license, registering to vote, opening a bank account, and notifying federal and state agencies of your new address.
• Objective Evidence: Beyond declarations of intent, objective evidence is crucial. This might include the location of your primary medical care providers, where your children attend school, and where you maintain your financial accounts.

The Impact of AB 2016 and the Small Estate Affidavit on Spousal Domicile

The rules surrounding probate and estate administration have changed dramatically in California. For deaths on or after April 1, 2025, Assembly Bill 2016 (AB 2016) provides a simplified process for transferring assets, particularly a primary residence valued up to $750,000. However, it’s essential to distinguish this “Petition” for succession under AB 2016 (Probate Code § 13151) from the Small Estate Affidavit, which is strictly for real property valued under $69,625 (like a timeshare or vacant land). If a spouse’s estate exceeds the limits for both, a traditional probate proceeding may be required. Furthermore, to qualify for AB 2016, the decedent’s other non-real estate assets (cash, stocks, etc.) must typically remain below the separate $208,850 Small Estate limit. Incorrectly applying these rules due to differing domiciles can lead to significant delays and expenses.

How a CPA Can Help with Domicile Planning

As a CPA, I can bring a unique perspective to domicile planning. It’s not just about avoiding probate; it’s about minimizing estate taxes and maximizing the “step-up in basis” for assets. The One Big Beautiful Bill Act (OBBBA) permanently increased the Federal Estate Tax Exemption to $15 million per person effective Jan 1, 2026, but California income tax consequences still loom large. Understanding the interplay between federal and state tax laws is vital. For example, if one spouse dies domiciled in California, the assets inherited by the surviving spouse will generally receive a step-up in basis to fair market value, eliminating capital gains tax on any subsequent sale. However, if the surviving spouse subsequently moves out of state, it’s crucial to document that move properly to avoid future California tax liabilities. Auditors will use 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.

What does a California probate court look for when interpreting testamentary intent?

In California, a last will and testament is reviewed under probate standards that focus on intent, capacity, and execution. Clear drafting reduces ambiguity, limits misinterpretation, and helps families avoid unnecessary conflict during estate administration.

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.