Domicile with existing residence?

[RoamingRanger]

Hello,

We're new to the forum and have a question regarding a domicile. Our family is originally from California where we still own a residence however we have been living in Africa for the last two years. We are looking to transition back to the US at some point but aren't eager to go back to the hustle and bustle CA lifestyle. We've considered leaving California permanently for various reasons but have recently began to seriously consider RVing full time as a means to see America and allow our children to view American history firsthand.

We've began to research moving our domicile to SD, TX or FL but wonder if this is even possible if we continue to maintain our home in CA. While we don't plan to move back to CA anytime soon and would thus prefer not to continue to pay the high CA taxes, the home we currently own has been in the family for sometime so we'd prefer not to sell it for sentimental reasons.

Is is possible to domicile in a different state while continuing to hold a CA residence? If so, do additional steps need to be taken to ensure CA doesn't try to continue to classify us as a CA resident?

Also, for income, I would likely consult remotely for a company I used to work for while my wife has the opportunity to work as a traveling nurse in the states we visit. Thanks for any insight you can provide.

[docj]

As a result of your sojourn in Africa you have a perfect opportunity to disconnect yourself from the State of California.  There is nothing that prevents people from having property in a state other than the one they are domiciled in.  However, you don't say how much time you plan to spend in CA once you start RVing. 

If the State were to question whether or not you had truly established a domicile elsewhere, a key piece of evidence would be how much time you (and your RV) spent in CA.  For example, if  you came through twice a year for a couple of weeks each time to visit family and could document this you probably would be fine.  But if you spent half the year in CA I think there would be a strong argument that you really haven't left the State.

Your income sources sound perfect for life as RVers.  Many of us work online from our RVs and there are lots of traveling nurses doing the same thing.

Joel (AKA docj)

Edited June 27, 2020 by docj

[Bill Joyce]

Is someone else in your family willing to buy the house or reliably pay you rent to live there?  If not, you are the only one who truly cares that it stays in the family.  If no one else will actually put the money down, you know that the estate will sell the place when you die.  My wife's family went through this with the old family house that her great grandparents built. They finally ended up selling it to stop the financial drain and the family bickering over upkeep.  

[Kirk W]

The ownership of real estate does not create a domicile, but can be a contributing factor. Legally, it is the place where you establish evidence of intending to reside there, by such things as where you bank, subscribe to newspapers, your doctor's location, register & insure vehicles, register to vote, maintain a permanent address, pay your taxes, and a long list of other contributing factors. There is no one thing but a combination of the majority of things. If you have been voting and paying taxes in CA while in Africa, I strongly suggest that you file a partial year tax return to CA, as soon as you get a new domicile established. To really understand the issues that can be involved, I strongly suggest you start by reading the following article that was written by the CEO of Escapees RV Club and also an attorney. 

The Issue of Domicile

The issue of domicile is not nearly as simple as many RV folks make it, if you should ever be challenged on it in a court of law. Most of us never have that experience, but when it dose happen the result can be disastrous if you have not done things properly.

[Jim & Alice]

33 minutes ago, Kirk W said:

The issue of domicile is not nearly as simple as many RV folks make it, if you should ever be challenged on it in a court of law. Most of us never have that experience, but when it dose happen the result can be disastrous if you have not done things properly.

As a retired Township Treasurer (ie, 'tax collector'), I have seen this tragedy from all sides.   It can be very hard on good folks that didn't realize that declaring/establishing a domicile has ramifications.   In Michigan, it is common for retired folks to own properties in, say, Florida... while retaining the home back in Michigan.   And that is where the problem possibilities start. 

[Zulu]

2 hours ago, RoamingRanger said:

We're new to the forum and have a question regarding a domicile.

Consult an attorney.

[Kirk W]

13 minutes ago, Jim & Alice said:

 It can be very hard on good folks that didn't realize that declaring/establishing a domicile has ramifications. 

That is especially true if you don't realize that you will lose any homestead tax exemption. 

[Jim & Alice]

1 hour ago, Kirk W said:

That is especially true if you don't realize that you will lose any homestead tax exemption. 

Absolutely!

[2gypsies]

Welcome to the forum!  This site can be very help to you in RV and full-time matters. 

However, I would also recommend that you consult with an attorney for specific answers to your specific circumstances.  Probably a RV forum is not the place to do it..... especially for California.

I would also recommend you sell the house if no one in your family is interested in it if it proves to be a financial burden.

Best of luck!!

[richfaa]

Kirk W explained it well     "The ownership of real estate does not create a domicile, but can be a contributing factor. Legally, it is the place where you establish evidence of intending to reside there, by such things as where you bank, subscribe to newspapers, your doctor's location, register & insure vehicles, register to vote, maintain a permanent address, pay your taxes, and a long list of other contributing factors'" Our Domicile is Ohio. We vote in that State our vehicles are tagged in that state. We pay Ohio State taxes. We have a residence in Florida. We  taxes on that property. We have a mailing address at that property. We reside in Ohio more  than 6 months of the year and Florida less than 6 months of the year. Normally one will Domicile in one Place and can have  residence in many places . We have had residence in as many as 3 different  states but only one domicile .Do some research on the difference between Residence and Domicile 

[RoamingRanger]

Lots of great information, thank you everyone for your contributions. I'll try to address the questions/comments below.

Because this home has been in our family, property taxes remain relatively low(ish) due to Prop-13 which is another pro for keeping it. In reality, if we sold it now, the likelihood of being able to afford the same home in CA at some point in the future is low. If we choose to keep it we keep the door open for being able to return at some point after our mortgage is paid off and thus living there is a little more affordable.

We still have a lot of family in CA so I'm sure we'd visit on occasion however the vast majority of time would be spent outside of the state. If I continued to consult for my former company I'd also anticipate a couple 2-3 day work related trips per year.

Agreed regarding an attorney, that sounds like the next logical step. I'm just trying to educate myself a bit before seeking paid, professional advice.

 

[Kirk W]

4 hours ago, RoamingRanger said:

We still have a lot of family in CA so I'm sure we'd visit on occasion however the vast majority of time would be spent outside of the state. If I continued to consult for my former company I'd also anticipate a couple 2-3 day work related trips per year.

CA is such a large state with everything from the sleepy rural town that is far from the beaten path, to the mega-cities like LA & SF so what it would mean to keep the present house has a very wide range of possibilities. Since you have been out of the home for two years, have you had the house rented to others, or is it sitting empty? Will you rent it out when on the road, or keep it empty to use when you do return to CA for a few days? An empty house will usually begin to degrade so maintenance to the house could become problematic. I married a CA girl more than 50 years ago and nearly all of her relatives are still there so we get back frequently and we are very familiar with the prop-13 ramifications. One of the questions that you need to determine soon is whether or not you will wish to return to CA and live there. If you sell, the equity of that house would likely buy more house for cash in many other parts of the US. For example, our son purchased a 5 bedroom, 3400 sq/ft home in a Dallas suburb for $310k about the same time that Pam's sister's house of 1800 sq/ft located 60 miles east of LA was appraised for $400k+. Our son's house is about 10 years old and the CA hose was built in 1961.

Something you have not mentioned is the amount of experience that you have with RV travel? If you have never owned an RV, you need to be very careful in that part of your decision as well since it is a lifestyle that most people do not enjoy as an only home. How old are the children and how will they like the RV life after a year or two of it? Do you know what is involved in living and traveling in an RV? Do you realize that an RV is typically worth no more than 10% of the purchase price after 10 years of use with proper maintenance? There is far more to this question than just what to do with the CA house.

[2gypsies]

This site might help with questions traveling with the children:

http://fulltimefamilies.com/

[RoamingRanger]

Thanks for the link 2gypsies! I've heard of Fulltime Families but need to research further. Seems like a great opportunity for community.

Kirk- The plan is to have renters in the house. We have never owned an RV but have owned a boat with sleeping quarters so I'm very familiar with maintenance, upkeep, cost of ownership, depreciation, etc. Our kids are already in a homeschool program so education would remain unchanged with exception to "being able to see" history firsthand as opposed to just reading about it in a book. Our oldest child (10) is gung-ho, the others are a bit more impartial. It would no doubt be different than anything they've experienced but then again our transition would be from Africa, not suburban America so I'm fairly confident we'd do fine. If not, we'd still have the option to return to our domicile, move back CA or even Africa :-). Thanks for your great questions. You are certainly correct, there are many factors that need to be considered. It's not a decision to be taken lightly.

[sandsys]

10 hours ago, RoamingRanger said:

Our kids are already in a homeschool program so education would remain unchanged with exception to "being able to see" history firsthand as opposed to just reading about it in a book.

Learning biology and geology are easier when traveling as well. National parks have junior ranger programs that kids love and they earn badges when they complete the work. State parks often have ranger led talks. Living history sites were our favorite as you could actually watch people do things in primitive ways and ask them questions. And, of course, learning geography is easier when you need to read maps and plan routes. Oh, this is going to be so much fun for your family!

Linda Sand

[RoamingRanger]

1 hour ago, sandsys said:

Learning biology and geology are easier when traveling as well. National parks have junior ranger programs that kids love and they earn badges when they complete the work. State parks often have ranger led talks. Living history sites were our favorite as you could actually watch people do things in primitive ways and ask them questions. And, of course, learning geography is easier when you need to read maps and plan routes. Oh, this is going to be so much fun for your family!

Linda Sand

Hi Linda, Did (or do) you camp with your kids? If so, I'd love to hear about your experiences. Both good and bad. Thanks so much for your input! 

[Twotoes]

I am a full timer. My domicile is So Dakota. I still own my house in CA, which is rented out as well as two other rentals. I file a non resident CA Income Tax return for the rental income. Property tax of course is also paid on each house. I have a So Dakota driver’s license and all my vehicles are registered in So Dakota. My auto and health insurance is from a So Dakota insurance broker. CA is satisfied as long as they get the income tax from my rental income and will also get the capital gains tax when I sell the properties. You should have no problems retaining ownership of the CA house and establishing a domicle in another State. 

[sandsys]

9 hours ago, RoamingRanger said:

Hi Linda, Did (or do) you camp with your kids? If so, I'd love to hear about your experiences. Both good and bad. Thanks so much for your input! 

We did those things with our daughter but she's now 50 years old so it has been awhile.

When we still lived in a house we pinned a huge map of the US on one wall to use in planning a 3-week trip. I provided books and brochures for all of us to read. (Our daughter was 10.) We each had a different color push pin which we used to mark places on the map we wanted to go. Then we planned our route based on the most push pins along a more or less linear line. It was a wonderful trip! And that was just one of them.

Linda

[RoamingRanger]

Twotoes- Thanks for your valuable input. It's nice to know things have worked out with your domicile in SD while maintaining your properties in CA.

Linda- Sounds like such a great adventure!! I like the idea of giving your daughter the ability help decide where you traveled. Hopefully she has fond memories as she looks back on her childhood travels.

[Kirk W]

Have you considered doing RV traveling as a part of making the decision about the house? You can always choose to sell it after you travel for 6 months or a year. Many of the fulltime RV community do it that way. If your financial position allows you to have both I think that would be a better plan.

Does your employer supply health insurance for your family, as that would be the biggest problem that I see with using SD as domicile. FL has the best availability for health insurance that will cover you everywhere you travel, while SD has the least. Have you maintained a CA domicile while you were out of the US? If not it would be pretty easy to establish one in any state you choose, as long as you choose one that will accept a mail service as your legal address. There are several othyers in addition to the 3 most popular states, TX, SD, & FL. The reason that those are most popular is that they share several very important aspects. None of them have any state income tax, none of them require you to be physically present in the state for a period of time to establish residence, and all 3 accept the use of a mail service for legal purposes (driver's  license, voting, vehicle registration, etc.) Nevada does allow use of mail service but they also have an income tax. Oregon does also but they require you to be physically present in the state for 6 continuous months. There are other examples. 

[RoamingRanger]

Hi Kirk- Yes, we have considered RV traveling as part of making the decision about the house, potentially moving elsewhere, etc. All options are are on the table at this point. This is another reason to keep it and rent it out for the time being, until we have a better sense of our plan. Before moving to Africa, we had previously considered moving to both TX and FL so perhaps one of these two states would be a logical place to land when returning to the US. We have friends in both which would certainly help the transition.

We are currently on a Christian Health Sharing plan so moving wouldn't have a significant impact from a medical insurance perspective.

Also, we are still considered residents of CA since it was our last place of residence since leaving the US.

Thank you all for your wonderful input and questions. You've been a tremendous help!

[Kirk W]

3 hours ago, RoamingRanger said:

Before moving to Africa, we had previously considered moving to both TX and FL so perhaps one of these two states would be a logical place to land when returning to the US.

While those are both states that I have a strong preference for, I would caution you that they are also states that currently have major covid-19 problems, do don't be in a rush.