Can I Have Dual Domicile in Escondido and Abroad

I recently spoke with David, a retired software engineer who discovered a codicil to his mother’s trust was improperly executed after her passing. The cost to validate it through the courts, and potentially litigate with his siblings, was projected to exceed $30,000 – all because of a technicality with the signing. These situations are tragically common, and often completely avoidable with proactive planning. As an Estate Planning Attorney and CPA with over 35 years of experience here in Escondido, California, I’ve seen firsthand how seemingly small errors can create enormous headaches for families. And as a CPA, I’m uniquely positioned to understand not only the legal ramifications of estate planning, but also the crucial tax implications – particularly regarding domicile and asset protection.

What Happens When You Claim Multiple Residences?

The concept of “domicile” is central to estate planning and taxation. It’s more than just where you hang your hat; it’s your true, fixed home – the place you intend to return to, even when absent. Increasingly, I’m seeing clients like David who have strong ties to both California and another country. They may own property in Escondido and spend significant time abroad, leading them to believe they can establish dual domicile. Unfortunately, that’s not how the law works. You can have multiple residences, but you can only have one domicile.

How Does California Determine Your Domicile?

California, like most states, looks beyond just the number of days you spend within its borders. Spending less than 183 days in California does not automatically terminate residency; the Franchise Tax Board (FTB) uses the ‘Closest Connection’ test (evaluating 19 factors like your primary doctor and social ties) to determine domicile. This means your intentions, demonstrated through your actions, are paramount. Do you maintain a California driver’s license? Where are your bank accounts located? Where do you receive your mail? These are all important considerations.

What About Estate Taxes and the OBBBA?

The federal estate tax landscape has undergone significant changes. The 2026 ‘Sunset’ was averted by the One Big Beautiful Bill Act (OBBBA), which permanently increased the Federal Estate Tax Exemption to $15 million per person effective Jan 1, 2026. However, even with this increased exemption, proper domicile planning is crucial to avoid unnecessary estate taxes, especially if you have substantial assets. Misunderstanding your domicile can lead to your estate being subject to both California state estate taxes and federal estate taxes, significantly reducing the inheritance your beneficiaries receive.

How Does Domicile Affect Real Estate and Probate?

For real estate holdings, the rules can be complex, particularly concerning probate avoidance. 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). It’s important to understand this is a Petition that requires a Judge’s Order, not an Affidavit. However, to qualify, the decedent’s other non-real estate assets (cash, stocks, etc.) must typically remain below the separate $208,850 Small Estate limit.

It’s easy to mistakenly think the Small Estate Affidavit covers all property. That’s incorrect. The Small Estate Affidavit (strictly for real property < $69,625, used for timeshares/vacant land) is a completely separate procedure and isn’t applicable to larger estates or primary residences exceeding that value.

Properly establishing domicile is also essential when it comes to validating wills and trusts. As David’s case illustrates, even a minor technicality regarding execution can trigger costly legal battles. Having a clear and defensible domicile record significantly strengthens the validity of your estate plan.

What if I Move My Business Abroad?

Many of my clients are entrepreneurs or have investment portfolios. They often ask if simply moving themselves to another country automatically protects their business assets. The answer is a resounding no. 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.

Furthermore, the FTB will scrutinize your residency claims meticulously. 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.

Establishing a clear and consistent domicile record requires careful planning and documentation. It’s not simply about spending time in a different location; it’s about demonstrating a genuine intent to make that location your permanent home.

What standards do California judges use to determine a will’s true meaning?

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.