Domicile - Avoiding the Massachusetts Estate Tax and Moving To Florida

Not surprisingly, Massachusetts continues to be one of the most expensive states in which to die. The Commonwealth has decided not to follow the increasing federal estate tax exemptions and has “frozen” its exemption at $1,000,000 with graduated rates from 6% to 16%. If there is a federal estate tax due, the Massachusetts estate tax will be a deduction in computing the federal estate tax so the effective rate usually will be around 6% to 8%, depending upon the value of the decedent’s estate.

It is for this reason that many of our clients have changed their residence to the State of Florida. Some have considered New Hampshire, but Florida is preferable inasmuch as the implementation of a state estate tax will require a constitutional amendment as opposed to simply legislative action by the state’s House and Senate and is not likely that the citizens of Florida would vote to impose an estate tax on themselves.

In order to change your domicile, you must provide sufficient evidence to show that you were living in the state at the time of your death with the “intent” to permanently reside there.

To help you with this process, I am providing you in advance with the questions asked by the Commonwealth of Massachusetts after your death. These questions are as follows:

  1. a. Place where decedent was domiciled at date of death (city and state or country).
    b. Year domicile established.
  2. a. Place of decedent’s death (attach a copy of death certificate)
    b. Place of burial.
    c. Residence address at death.
    d. Date and place of birth.
  3. What is your relationship to decedent?
  4. What are the names and residence addresses of decedent’s surviving spouse and members of the immediate family including children and parents? If none of the above, list brothers and sisters. (attach separate listing if necessary).
  5. Did the decedent leave a will? Yes or No. If yes, name the court(s) which admitted the will to probate, the docket number, the date admitted and also the court(s) which allowed ancillary administration.
  6. If the decedent did not leave a will, has an administrator of the estate been appointed? Yes or No. If yes, name each court which appointed an administrator or ancillary administrator and indicate the date of appointment for each. (attach an attested copy of the petition for administration listing the heirs at law unless filed previously).
  7. Did the decedent ever live in Massachusetts? Yes or No. If yes, during what period(s)?
  8. Indicate the address, nature of decedent’s places of residence (e.g. house rented or owned, apartment, hotel or home of relatives or friends) and lengths of periods outside Massachusetts during the five years preceding death.
  9. Indicate the address, nature of decedent’s places of residence and lengths of periods in Massachusetts during the five years preceding death.
  10. Where and in what years did the decedent vote or register to vote during the five years preceding death?
  11. To what state, county or municipality and in what years did the decedent pay a tax on income, real estate, or on intangible property during the last five years?
  12. For which taxable year did the decedent last file a Massachusetts income tax return?
  13. In what office(s) of the Internal Revenue Service did the decedent file his federal income tax returns during the five years preceding death? What was stated therein to be the decedent’s residence?
  14. What was the decedent’s occupation in the five years preceding death? Give name and address of employer. If self-employed, indicate same; if in partnership, give the name and address of the firm and the individual partners. If decedent owned a business, give details.
  15. Did the decedent make application for a passport within the last five years? Yes or No. If yes, give date(s) and place(s) and home address on the application.
  16. Did the decedent at any time during the five years preceding death execute a will, codicil, trust indenture, deed, mortgage, lease or any other document in which decedent was described as a resident of Massachusetts? Yes or No. If yes, describe such document and state what residence address(es) were set forth therein.
  17. Was the decedent a party to any legal proceeding in Massachusetts during the last five years? Yes or No. If yes, what was the tribunal, date and type of action?
  18. Did decedent belong to any church, lodge or other social fraternal or religious club or organization in Massachusetts? Yes or No. If yes, give name, address, positions held, membership status, etc.
  19. Did the decedent maintain a safe-deposit box or bank accounts in Massachusetts at any time during the five years preceding death? Yes or No. If yes, give name and address of bank(s). Who, other than the decedent, was authorized to open the box or make withdrawals?
  20. Did the decedent hold a Massachusetts driver’s license at any time during the five years preceding death? Yes or No. If yes, give dates.
  21. Was an automobile registered in the decedent’s name in Massachusetts at any time within five years preceding death? Yes or No. If yes, give dates.
  22. Did the decedent undergo medical treatment or examinations, or was the decedent hospitalized in Massachusetts at any time within five years preceding death? Yes or No. If yes, please furnish names and address of the attending physicians and dates admitted or examined.
  23. Did the decedent within five years prior to death indicate Massachusetts as home or residence on any government, employment or similar form? Yes or No. If yes, provide explanation.
  24. Has question of domicile been raised in any jurisdictions for any purpose, i.e. income tax, in the last five years? Yes or No. If yes, state where what facts were disclosed and what decision was reached.
  25. What other information do you desire to submit in support of the contention that the decedent was not domiciled in Massachusetts at the time of death?
  26. Complete the schedule below, listing gross values of all real and/or tangible personal property having an actual situs in Massachusetts includible in the gross estate. Indicate reference(s) to U.S. Form 706. Do not deduct the value of any mortgage or lien.

Please be aware that you do not need to be living in Florida for five years prior to death, but the Commonwealth of Massachusetts wants information about your activities for the five year period prior to death for them to make a determination as to whether to challenge your change in domicile.

If you are contemplating a change, which could save your family hundreds of thousands of dollars, and are considering property in the southeastern Florida counties of Broward, Dade and/or Palm Beach County, I suggest you contact my real estate brokers, Mr. and Mrs. Clay Mitchell, at www.clayandlauramitchell.com. You will find them to be diligent and competent, with tremendous resources at their disposal.

For more information about changing domicile, please contact me at 617-523-1555 or at Lcushing@cushingdolan.com.