Traversing Multi-jurisdictional Estate Planning

• Publication year: 2001
• Pages: 93

30 Colo.Law. 93 Colorado Lawyer 2001.

2001, July, Pg. 93. Traversing Multi-Jurisdictional Estate Planning

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93

Vol. 30, No. 7, Pg. 93

The Colorado Lawyer
July 2001
Vol. 30, No. 7 [Page 93]

Specialty Law Columns
Estate and Trust Forum
Traversing Multi-Jurisdictional Estate Planning
by Jennifer M. Spitz

As increasing numbers of people are moving across state lines,1 Colorado estate planners are apt to encounter more clients moving to Colorado with out-of-state estate planning documents and out-of-state property. In addition, existing clients may leave Colorado, but wish to retain the services of their Colorado attorneys. Other clients may have more than one home, and it may be unclear where they are domiciled This article discusses how, in each of these instances Colorado estate planning attorneys should determine what law applies to their clients' estate planning documents and property and should determine the extent to which the attorneys can represent and advise their clients when other states' laws apply

Domicile

The practitioner initially should ascertain where the client is domiciled. Domicile is important because it may affect several legal issues, including which state's laws apply to determine the validity and construction of wills and trusts and to questions of property ownership, and where a trust is subject to income taxation.

Every person should have only one domicile. However, domicile has no universally accepted meaning. As a result, if more than one jurisdiction applies its laws to determine whether a person is domiciled in the jurisdiction, each may claim that the person is domiciled in its own jurisdiction. Therefore, if a client has multiple homes, an important task for the estate planner is to clarify which jurisdiction is the client's domicile.

Determining domicile is a factual inquiry. It is not necessarily the same as residence. Domicile depends upon the client's intent to make a location his or her permanent home, or his or her home for the indefinite future, as well as the qualitative presence of the client in the jurisdiction.2 The factors to be considered include:

The client's views on where he or she is domiciled, including where the client tells friends and relatives he or she is domiciled (the client's views are not conclusive, but are an indication of intent);

A recitation of domicile in the will (this is an indication of domicile at the time of execution, but not necessarily at the time of death);

If the client has multiple homes, the number of days spent at each home during the year;

Which residences are owned by the client and which are leased (ownership suggests permanency);

Whether the client leases any of the client's residences to others;

Which of the client's homes was acquired first;

The jurisdiction where the client is registered to vote, has a driver's license, and vehicle registration;

The location of the client's bank accounts, safe deposit boxes, investment advisors, and attorneys;

The jurisdiction where the client keeps important documents, such as estate planning documents;

The place where the client keeps valuable tangible personal property;

The address used by the client as the mailing address for bills, investments, credit cards, Social Security, veteran's benefits, pension benefits, legal documents, magazines, and personal mail;

The jurisdiction where the client works or, if self-employed, where the client operates a business and owns business properties;

The jurisdiction where the client pays state taxes;

The location of the client's primary social, religious, and charitable affiliations;

The jurisdiction where the client has established credit;

The jurisdiction claimed as the client's domicile in any lawsuits; and

A declaration of domicile filed with a state (some states, such as Florida, authorize filing such a declaration).3

Colorado estate planners who want to clarify that their clients are domiciled in Colorado should focus on the factors that can be changed and weight those factors in favor of Colorado. For example, they might advise the clients to keep bank accounts, store important documents, register to vote, register vehicles, and obtain a driver's license in Colorado.

Validity and Construction
Of Wills and Trusts

Different rules apply to the determination of which state's laws apply to the construction of a will or trust, as opposed to the determination of which state's laws apply to questions of validity, although the distinction between validity and construction is not always clear. Furthermore, different rules apply to determine which state's laws apply to questions of the validity of wills, as opposed to trusts. As a result, the laws of several states may apply to one client's estate plan.

Some of these rules hinge upon whether property is characterized as real or personal property. That question itself can have different answers depending upon which state's laws apply. More than one state may apply its laws to that question, resulting in a conflict of laws. Also, some states draw a distinction between movable and immovable property, rather than real property and personal property, which may result in different characterizations of property.4

Validity of Wills

In order to dispose of real property, a will must be considered valid by the state where the property is located. In contrast, in order for a will to dispose of personal property, the will must be considered valid by the state where the client is domiciled at death. Even if personal property is located in another state, that state generally will look to the law of domicile. An attempt to specify which state law controls questions of validity will not be effective in states that do not recognize such a provision.5

In Colorado, CRS § 15-11-506 provides that a written will is valid if one of the following criteria is met: (1) it is executed in compliance with CRS § 15-11-502 (witnessed or holographic wills); (2) it complies with CRS § 15-11-503 (writings intended as wills); (3) at the time of execution, its execution complies with the law of the place where the will is executed; or (4) at the time of execution or the testator's death, its execution complies with the law of the place where the testator is domiciled, has a place of abode, or is a national.

Other state statutes are similar, but not all are identical to...