With inflation and taxes wreaking havoc on client budgets, more of our clients are questioning their cost of living and states of residency. For high-net-worth clients who primarily live off portfolio income, relocating to a lower cost of living state or a state with a lower tax burden can be a surefire way to save. We provide all clients with a detailed tax analysis when relocating and guide them through the financial and non-financial consequences of relocating.
Below is a checklist we use to help clients ensure they properly document the process of establishing residency in a new state domicile.
Checklist for Establishing New State Domicile
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Obtain a driver’s license in your new state and surrender your old license.
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Register your automobiles in your new state.
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Register to vote in your new state and strike your name from voting records in your old state.
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Be sure to file your tax returns with an address in your new state. For the year that you move, be sure to mark your last return as a resident as “FINAL” and use your new state address.
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Update your will and trusts to recite that you are a resident of a new state and that they comply with local laws.
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Describe yourself as a resident of your new state in all legal documents, such as passports, real estate deeds, contracts, leases, or credit applications.
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Update all financial records, such as banking institutions, creditors, insurance providers, brokerages, custodians, or companies in which you own stock, with your new address.
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Update mailing addresses for any out-of-state accounts that you maintain.
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When possible, withdraw membership in any club outside your new state where residence of that state is a prerequisite to holding such member.
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Transfer your religious affiliations to your new state.
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Seek out new doctors, dentists, and other medical providers to maintain your health records in your new state.
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If you maintain a safe deposit box, be sure to move its contents with you to your new state.
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Conduct any business in your new state as much as possible.
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Disclaimer: Information provided is for educational purposes only. HBWM does not provide tax, legal, compliance, or accounting advice. In considering this material, you should discuss your individual circumstances with professionals in those areas before making any decisions. Further, HBWM makes no warranties with regard to such information, or a result obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.