I will repeat this question because it is really the focus of my
presentation. If and when you are named in one or more of these lawsuits, will
you be in a better position if you are domiciled in New York or you are
domiciled in Florida or will it make no difference? The answer will depend on
your particular facts and circumstances. But let us assume for purposes of this
discussion that the Bankruptcy Trustee and other plaintiffs in these lawsuits
will find it more difficult to recoup funds from you if you are domiciled in
Florida rather than New York. This assumption in part is based on the very
liberal creditor and debtor laws in Florida that protect the Florida homestead
in many instances against the claims of creditors and is based in part on the
four year statute of limitations in Florida that may apply in some instances
rather than New York’s six year statute of limitations/
I suggest that you each check with your own professional advisor whether in
your particular situation there would be any advantage in having a Florida
domicile rather than a New York domicile.
If you are advised that you would be better off if you are domiciled in
Florida, how do you know if you have already effectively changed your domicile
to Florida? You cannot rely on the fact that you have never had a domicile tax
audit by New York State. Even if you have been audited, you cannot rely on the
fact that your domicile change.was approved. You cannot rely on the fact that
the Florida Tax Assessor has granted you a homestead exemption for many years or
that you have been allowed to vote in Florida. The plaintiff who commences a
lawsuit, including the Bankruptcy Trustee, may not be bound by any of these
facts.
The concept of domicile is very subjective and elusive, but nevertheless
important. For example, the laws relating to marriage, divorce, inheritance,
adoption and guardianship are generally governed by the state in which you are
domiciled. Your spouse may have different marital rights depending on whether
you are domiciled in New York or Florida. If your estate plan has an in
terrorem clause, that can result in a forfeiture to a child who objects to
any provisions, the in terrorem clause may be valid in New York but not
in Florida.
Likewise, except where pre-empted by federal bankruptcy laws, some laws
relating to creditor/debtor rights may differ depending on whether you are
domiciled in Florida or New York.
Let’s discuss what is meant by domicile. The concept of domicile has been
around for a long time and its definition has not changed very much. Domicile
was defined by Roman law to mean "in whatsoever place an individual has set up
his household goods and made the chief seat of his affairs and interests, from
which, without some special avocation, he has no intention of departing; from
which when he has the departed, he is considered to be away from home, and to
which when he has returned, he is considered to have returned home."
The concept of domicile has not changed much since the Roman days. Domicile
is characterized in the New York Tax Regulations as the place which an
individual intends to be his permanent home and the place to which he intends to
return whenever he may be absent and points out that once established, a
domicile continues until the person moves to a new location with a bona fide
intention of making his fixed and permanent home there.
The leading case in New York State was decided by the New York Court of
Appeals in 1908. It remains "good law" and is often cited in tax and other types
of cases although it has nothing to do with taxation. It involved a Mrs.
Newcomb. During a period of 30 years and until she was about 80 years of age,
her domicile was in New York City. She resided part of the year in New Orleans
and part of the year in New York City. She wanted to make substantial bequests
to Tulane University and was concerned that her Will might be contested by her
relatives. She consulted with a Louisiana attorney who advised her to change her
domicile and sign a Declaration stating that New Orleans was her permanent home
and her place of domicile. The Louisiana domicile was challenged. It was argued
that Mrs. Newcomb resided in New York City and merely visited New Orleans and
that her later visits to New Orleans differed in no material respects from those
made earlier. It was also argued that she sought to become a nominal resident of
Louisiana merely for the purpose of making a Louisiana Will and not for the
purpose of making a permanent home. The Court of Appeals in the Newcomb
case rejected that approach and held that a retiree who maintains two homes can
pick and choose his or her permanent residence and his or her motivation for
doing so should not be relevant. The Court laid out various rules for
determining domicile where a retiree maintains two residences:
There must be a present, definite and honest purpose to give up the old and
take up the new place as a domicile.
Every retiree may select and make his own domicile, but the selection must
be followed by proper action. Motives are immaterial except as they indicate
intention.
A change of domicile may be made through caprice, whim or fancy, for
business, health or pleasure, to secure a change of climate or change of laws,
or for any reason whatsoever, provided there is an absolute and fixed intention
to abandon one and acquire another and the acts of the persons affected confirm
the intention.
A retiree may elect between his or her winter and summer residence and make
a domicile of either, provided he acts in good faith.
The right to choose implies the right to declare one’s choice formally or
informally as he or she prefers and even for the sole purpose of making evidence
to prove what his or her choice was.
No pretense or deception can be practiced, for the intention must be honest,
the action genuine, and the evidence to establish both, clear and convincing.
The burden of proof rests upon the party who alleges a change of domicile.
If your rights are governed by Florida law, some of the rules for defining
domicile may differ. In some instances, where a Florida or New York statute
refers to a person’s residence or permanent residence, it may be construed as
being equivalent to domicile but sometimes not.
Now that you may be totally confused, let me be more specific and discuss
some of the objective evidence that a court may take into account in determining
whether you are domiciled in New York or Florida.
