In the current globalized world individuals are more mobile than ever before and wealthy families now have the opportunity to live and maintain homes concurrently in different parts of the world.  This creates issues for members of these families when preparing their respective estate plans.

The estate tax provisions of the Internal Revenue Code (“I.R.C.”) creates a transfer tax on the worldwide assets of every decedent who is a citizen or resident of the United States at the time of his or her death.  The term “resident of the United States” for purposes of the U.S. estate tax is not the conventional understanding of resident but rather is defined as being domiciled in the U.S. at the time of death of the decedent.[1]  Domicile is acquired when an individual lives in a place with the intent to remain there indefinitely.[2]  Once domicile is acquired, it is presumed to continue until shown to have been changed.[3]  A change of domicile requires both actual removal to a different place and intent to remain there indefinitely.


Jane and John Sample are citizens of Switzerland.  They maintain a residence in Switzerland as well as in New York.  Their home in Switzerland is much larger than their home in New York and in Switzerland they own their home, while in New York they rent an apartment on the Upper East Side.  They maintain Swiss passports and spend 300 days a year in Switzerland.  They maintain a vehicle in Switzerland.  They have a vast collection of art work which is maintained primarily in Switzerland.  They have doctors, friends and a social network in both locations. 

The primary issue here is whether or not Jane and John Sample are domiciliaries of the United States.

There is no particular weighting structure which relates to the factors for evaluating an individual’s domicile as they are generally looked at from a holistic approach.  Here, Jane and John Sample clearly appear to have more ties to Switzerland and do not seem to be U.S. domiciliaries, despite their residing in the United States for a portion of the year and their maintenance of a residence in New York as well as having ties to the New York community.  However, domicile must be looked at on a facts and circumstances basis.  Additional facts to this scenario could result in a different conclusion with regard to the individual’s domiciliary status.
For a full discussion of these considerations you may download our full article Domicile for Estate Tax Purposes.
Please be sure to seek additional advice when determining your domicile or residence for estate tax purposes with a professional Tax Attorney specializing in this complex area.

[1] I.R.C. § 2001; Treas. Reg. § 20.0-1(b)(1).

[2] Treas. Reg. § 20.0-1(b)(1).

[3] Estate of Nienhuys v. Comm’r, 17 T.C 1149, 1159 (1952); Mitchell v. United States, 17 T.C. 1149, 1159 (1952).